House Hunting? Be Ready.
If you’ve been house-hunting lately, you know: The real estate market is about as hot as it’s ever been. In many cases, properties are being sold within weeks, if not days, after being listed.
Our senior loan officer, Sandy Churco, has helped hundreds of homebuyers make their way through the mortgage process. We spoke with her about what you can expect when purchasing a house—and how you can put yourself in a position to land the home of your dreams.
What can I do to make the mortgage process easier?
As a homebuyer, in this market, you need to act fast. And unless you’re paying cash, you’ll need to arrange financing. But if you wait to find the house of your dreams before you start shopping for a mortgage, you’re already behind.
Doing a little legwork before you make an offer on a house can put you in a better position to put that new home under contract—and ensure that you’re not getting in over your head with more house than you can afford.
Even if you’re not a first-time homebuyer, the process of buying a home and getting a mortgage can be confusing and time-consuming. An experienced mortgage lender can make it go a lot smoother, and make this exciting time in your life a lot less stressful.
Should I find a house before I find a local mortgage lender?
You’re better off talking to us even before you start the search for your new home. The first step in the mortgage process is pre-qualification. This important step requires working with a knowledgeable mortgage lender to determine how much house you can afford.
As part of the pre-qualification process at Adirondack Regional Federal Credit Union, we’ll consider your income, debts and credit score and let you know, upfront, how much you can borrow.
Then, we’ll provide you with that information in a mortgage pre-qualification letter you can share with sellers when you make an offer. We’ll also give you an idea of how much your interest rate might be, based on your credit rating.
Why should I pre-qualify for a mortgage?
When you have a pre-qualification letter in hand, sellers know that you’re a good prospect who is likely to get a mortgage. That’s important, when you may be competing with offers from other buyers for the same property.
It’s also a way of ensuring there are no unpleasant surprises if you head to a mortgage lender only after locating a property.
Pre-qualification can be an important reality check on how much home you can afford. It can be really frustrating to find a great place, just to discover you can’t borrow as much as you need to buy it.
The pre-qualification process is simple: You just need to provide your income and Social Security number (and your co-borrower’s info, if you’re applying jointly). We’ll run the numbers and let you know how big your mortgage can be.
If you’re borrowing, you’ll have to make a down payment on the home you’re buying. At Adirondack Regional FCU, the most we’ll lend is 80 percent of your purchase price. So if you purchase a home for $100,000, we’ll expect you to put $20,000 toward the purchase.
Your pre-qualification letter may indicate that we’ll lend up to $100,000. But if you want to borrow that much, you need to make sure you have enough of a down-payment to make that loan work.
What if I don’t qualify?
There are mortgage products available from other lenders that don’t require 20 percent down. For example, certain loans through Veterans Affairs (VA) don’t require any down payment. And the Federal Housing Administration (FHA) has home loans that begin with just 3.5 percent down.
There are other reasons we may not be able to offer a loan, though. Your credit score might be too low to qualify. Or you may owe too much money on your credit cards and other loans.
We know that it can be really disappointing to find out you don’t qualify for a mortgage. But there’s a lot we can do to help you improve your financial situation. We love working with our members to solve problems.
If you pre-qualify for a mortgage, and your offer is accepted—congratulations! There’s a lot of work left to do, though. Pre-qualifying for a mortgage is just a first step; it doesn’t guarantee you’ll get a mortgage, though it’s a good sign that you will.
Next month, we’ll look at the next steps in the mortgage process. If you’re a first-time homebuyer, the process can feel a little overwhelming. But when you choose a lender like Adirondack Regional FCU, we’ll always be here to make the road to living your dreams as smooth as possible.
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