Financing 101: What Every Homebuyer Should Know Before House Hunting

The biggest mistake buyers make? Falling in love with a home before knowing what they can afford. Getting your financing dialed in early doesn’t just save time — it gives you a serious edge in a competitive market.

• Step 1: Know your budget (and comfort zone)
  Lenders look at income, debt, and credit — but don’t forget to factor in lifestyle. Just because you can borrow it doesn’t mean you should. It is good to discuss with your lender what your ideal monthly payment will be. Keep in mind that while this monthly payment will include taxes and insurance, it does not include things like utilities and maintenance.

• Step 2: Get pre-approved, not just pre-qualified
  One carries real weight with sellers—The other is more of a guess. A pre-approval shows sellers and agents that you are serious and that you are able to purchase a home. Without a pre-approval many realtors will not show you houses, and even less will accept your offer.
  
  It is a little bit of legwork on the front end for you that saves everybody a lot of headache down the road. And don’t worry, it’s nothing to be scared of. Generally most lenders just need some documentation of income like paystubs and W2s as well as a bank statement, then they will handle things from there.

• Step 3: Understand your loan options
  FHA? Conventional? USDA? We help buyers every day figure out what’s best for their situation. Even if you don’t fit into the mold of traditional financing products, we work with a wide selection of lenders that can help you buy a home.

• Step 4: Don’t rack up new debt
  No new credit cards. No furniture shopping. Keep your finances still until closing day. First time homebuyers especially get over excited about this big milestone and want a new car and furniture to match—if you open new credit during the process of getting a mortgage you could end up disqualifying yourself, leaving the whole deal to fall apart! Don’t risk it, wait until we make it to the closing table just to be safe!

• Step 5: Shop with strategy
  With a real plan in place, you’ll be ready to jump when the right home hits the market. I can’t tell you how many times I have had clients who saw a house they loved but hadn’t taken the time to get pre-approved and didn’t get everything done in time to secure the house. There are thousands of buyers at any given time with a limited housing inventory, meaning if you are not prepared you could miss out!

Want to see what you qualify for before you start scrolling Zillow? Let me connect you with a local lender we trust — no pressure, just real info.