Checklist For Making An Offer
There is nothing worse than finding the perfect home for you and your family and not being able to submit an offer. Think about this for a minute: You and Your Agent spend the day looking at 8 different homes and you find that just one of them is perfect for you…you have Your Agent write up and submit an offer to theseller…The. Listing Agent asks for your Pre-Approval Letter and you don’t have one, because you think, “My wife and I make plenty of money”…or…”I know we have money in the bank and great credit”…no matter your reason, that Listing Agent is going to reject your offer and accept the offer of another Qualified Buyer. This is the reality we live in today.
Do you know where your down payment is coming from? If it’s coming from a 401k, or similar, do you know if there will be penalties? If you use a 401k Loan, how will that affect your DTI (Debt To Income) on your mortgage, and will you still be Approved To Buy? Bottom line, is that you need to be prepared for different down payment scenarios, and these will be based on the loan program that you and Your Lender select. You will also need to be able to provide proof of funds (Bank Statements, Tax Records, Etc), so that Your Lendercan trace every dollar being spent on your down payment.
Find A Lender that will send you and Your Agent a Pre-Approval Letter at the price you want to pay for the home, NOT a letter that shows the maximum amount you are actually Pre-Approved for. Why is that important? Well, if you want to purchase a home that’s listed for $400,000 and you submit an offer of $395,000, why would you let the seller know that you are actually Pre-Approved for $450,000? This tells the seller that you can pay more and they may try to counter your offer at a higher price than you are willing to pay. All of this means that Your Lender needs to be quick and flexible regarding your Pre-Approval Letter.
Ability To Close On Time
This is a BIG concern. In the past, 30 day escrows were “the norm”, but new legislation has been introduced for lenders that has those 30 day escrows being extended to 45 days, and beyond. It’s very important to understand time-frames and the time it’s going to take Your Lender to go from getting your disclosures signed (which are estimates of what will be required on your loan and the closing costs), to lending/closing docs being signed and the loan funded. If you need more information, Call Me.
Don’t Go Beyond Your Means
Know what you can afford, when buying a home, and stick with it. Let’s be honest, in the housing heyday, anyone with a pulse and a non-verified job could get a loan and purchase a home. Today it’s completely different. New banking regulations require lenders to do a lot more checking and verifying of income, to approve home loans. The main point is that your monthly payment PITI (Principle, Interest, Taxes, Insurance) and HOA (if applicable) should be comfortable, not stressful. Remember, you have the mortgage interest tax deduction that should save you a few hundred dollars a month
Obviously I am just scratching surface and their is much more to Buying A Home. I’d love to connect and meet with you, to discuss your home buying needs and the process. Please Call Me Today, to schedule your “no obligation” appointment.