Homebuyers Guide - Step 1

It is a very exciting time when you decide to either buy your first home or move to another home and along with that, it is important to have a good understanding of all the steps involved. You want to make sure your first home is the right purchase for your needs. It is my job to guide you through that process, with transparency, excellent communication, and educating you about the process so you can make the right decisions.

I hope this helps get you started and at any time don't hesitate to reach out with questions, in fact, please do ask a lot of questions!

TIP #1: START WITH A LENDER

Before you begin looking at homes, speak with a lender! Why? Below are several reasons to start with a lender.

• Too often buyers will jump over this step and start looking at homes without knowing what they can actually qualify for or afford. This can lead to disappointment. You may have your heart set on a particular neighborhood or home only to find out it doesn't fit into your budget or that you can't even qualify.

• Learn about the different loan options available to you and how a down payment can play a role with interest rates. There are good first-time homebuyer programs available but you'll need to talk with an expert to learn the qualifications.

• Homes in Colorado are selling very quickly. Most sellers will not even consider an offer unless the buyer provides a pre-approval letter. Better yet, if you connect with a lender, ask them to move you through the qualification process right up to underwriting. This gives the seller confidence you are a solid buyer.

• Having a full understanding of fees associated with obtaining a mortgage is a must! Most homebuyers understand the concept of the down payment, but that is not the only upfront expense when purchasing a home. In addition to the down payment, money must be allotted for costs associated with the loan, which generally run about 3% depending upon the lender, and closing costs.

Know The Difference Between Pre-qualification and Pre-approval

In the world of real estate, the terms "pre-qualification" and "pre-approval" are often used interchangeably. But they have different meanings.

Pre-qualification is an estimate of how much you can afford in a mortgage payment. It is based upon the information provided by you which will later be subject to the approval process and additional information including a credit report, appraisal, and income verification. This is the very first step that is more for your knowledge in learning how much of a house you can buy.

Pre-approval is the second step and is a firmer commitment on behalf of the lender. Obtaining pre-approval is a more formal process that includes a credit check and employment verification. During a pre-approval, the mortgage company does all the work of full approval except for the appraisal and title search. If you've been pre-approved for a loan, you can shop for a house with more certainty and less anxiety because you'll be able to sail through the entire process without having to worry the mortgage will be approved. Additionally, the seller is likely to view you as a more capable buyer. As an agent, in a fast-selling market, I rarely submit an offer without a pre-approval letter. Often your offer may be up against cash buyers, being pre-approved keeps you in the running!

Just know, I am here to help guide you every single step of the way!