Let’s talk about financing
Before you fall in love with a home we need to work on the next step in your home buying process which is getting financed. Working with a professional and experience lender is as important as working with a professional and experience real estate agent! About 80% of homes are purchased with a mortgage. Even if you have the ability to pay cash sometimes it makes sense to get a mortgage especially when rates are low.
The lender will help you understand how much home you can afford, what type of loan programs are available in the area which you are looking, and give you an idea of interest rates and what’s your payment might be per month.
Here is a list of some of the items you might be asked for by the lender:
- 2 years tax returns
- Current bank statements
- Newest pay stubs
- Checking and saving balances
- Retirement account balances
- “Profit and loss” if a 1099 employee
Armed with these and a current credit score your lender will be able to give you the power and information you need to be a better informed home buyer. They’ll also provide you with the lender letter. This is what we will include when making an offer on your dream home. The majority of sellers will consider your offer incomplete without a lender letter so we’ll need to have that very early in the process.
You’ve heard of “PITI” and here’s what that means
- Principal: the loan amount of money you pay for the home
- Interest: the amount the lender charges for the loan
- Taxes: are based on your assessed value
- Insurance: also known “homeowners insurance”
I only work with full-time professional lenders which means that you’ll have access to the best lenders in the business. Now that we know how much we can afford and what loan programs are available to us it’s time for us to find a new home!
