First Time Buyers - Getting new loans before deal is closed

You have pre-qualified for a loan. You found the house you wanted. The contract is signed and the closing is in 45 days. Don't celebrate by financing another big purchase.

Is your credit mortgage-ready? 

Why to keep the wallet shut

Lenders pull credit reports before the closing to make sure the borrower's financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.  Buyers, especially 1st-timers, often learn this lesson the hard way.

They sign the contract and they want to go buy new furniture for the house or a new car.  I remember one case where just before closing, the buyer drove to the office and said, 'Look at my brand-new car.' I told them, 'You'd better go back to that dealership.'"

Luckily, the dealership agreed to wait a couple of days to report the loan to the credit bureaus. Otherwise, it could have killed the deal.

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First Time Buyer - Using up savings on the down payment

Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes 1st-time home buyers make. Some people scrape all their money together to make the 20% down payment so they don't have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all.

It's risky to deplete savings

Home buyers who put 20% or more down don't have to pay for mortgage insurance when getting a conventional mortgage. That's usually translated into substantial savings on the monthly mortgage payment. But it's not worth the risk of living on the edge. 

I'd take paying for mortgage insurance any day over not having money for rainy days. Everyone -- especially homeowners -- needs to have a rainy-day fund."

Need a mortgage but you don't have much of a down payment? Call me today for information on a reputable lender.

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MAYA ANGELOU

First Time Buyer - Not getting professional help

New to the home buying game? You'll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer.

Venturing into this process alone, without professional help, is not a good idea.  While every rule has its exception, generally, 1st-time should not try to deal directly with the listing agent, he says.

"If you are getting divorced, are you going to go to your husband's attorney for help? Of course not," he says. "Same here. If you go to a listing agent, they are only going to show you their listings. You must find a buyers' agent to help you."

Get references

If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers.

"It's very hard for 1st-time home buyers because they don't know who they are dealing with..

It's crucial to find a professional who will give you "truly independent advice." 

You are about to make what is possibly the largest single investment of your lifetime. You want to make sure it's done right.

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First Time Buyer - Looking for a home 1st and a loan later?

Looking for a home 1st and a loan later?

Homebuying doesn't begin with home searching. It begins with a mortgage prequalification -- unless you're lucky to have enough money to pay cash for your 1st house.

Often, first-time home buyers "are afraid to get pre-qualified."  They fear the lender may tell them they don't qualify for a mortgage or they qualify for a loan smaller than expected. "So they pick a price range out of the sky and say, 'Let's go look for a house." 

Know where you stand before you start shopping. Get a free credit report and tailored rates with a lender.

First things first

And that's not how it should be done. Yes, it's more fun to go look at houses than to sit in a lender's office where you have to expose your financial situation. But that's a backward approach.  "You get pre-approved, and then you find a home."  That way you'll make a financial decision versus an emotional decision. Get pre-qualified today with a lender by calling me for further information.