Unless you are independently wealthy and are going to pay cash for your first home or next home, you may need the services of a mortgage lender. Here are 5 tips to help you navigate the mortgage industry and find the right underwriter for your home loan.
1. Does the lender embrace FHA, VA, and USDA loans? Government insured loans offer low minimum down payments and more relaxed qualifications requirements. If you are a first-time buyer this is very attractive way to purchase your new home.
2. Know your FICA score and credit history. Lenders use the FICA score and credit history to determine the risk factor in providing a loan to you. If you score is low and you have some hiccups in your credit history, talk with the lender or bank loan officer as to how you can improve your FICA score. You may have to delay purchasing a home until you can raise your FICA score and clear any credit history issues.
3. Investigate assistance programs. If you are a first-time buyer many lending institutions offer assistance programs that can help with down payments. Check with the lender about assistance programs during you initial conversation with them.
4. Request quotes from several lenders. This may sound time consuming, and it is, but it is in your best interest over the next 30 years or so to ensure that you are working with a professional lender who is service oriented and not quota driven. You would do the same if you were buying a car or looking for health insurance. Do it with your lender - shop around!
5. Get a preapproval letter from your lender before shopping for a home. When making an offer to a seller, the preapproval letter, from a lender, goes a long way in favorably positioning you with the seller. The seller is not interested in waiting for you to obtain financing when others are standing in the wings ready to close the deal.
Incorporate these 5 tips into your game plan for purchasing your first home or next home and position yourself to be a successful buyer.
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