Archive for March 17, 2014

What if I Can’t Afford What I Want?

What if I can’t afford what I want?  As prices continue to rise, we hear this more and more from our first time home buyers.  You may want a certain number of bedrooms and bathrooms, but your price range may make it tough to accomplish this in the neighborhood you want to be in.

So what are my alternatives?  The first and maybe easiest way to accomplish this it to look at other property types.  For instance, if you are looking for a single family home but feel like they’re out of your price range, you could start looking at townhouses or condos.Two lawn chairs

But I’ve always wanted a yard.  We realize for some first time home buyers, a single family home is all they’re willing to consider.  The next possibility is moving outside your specific geographic area to see if outlying areas are more affordable.

But we have to stay in our existing school district!  Sometimes first time home buyers are absolutely NOT willing to look outside a specific area due to school zoning or other reasons.  A third option is considering a property that needs some cosmetic updates.

As long as I get the number of bedrooms/bathrooms I want.  It may even make sense to look at a home with LESS bedrooms and baths, as long as it has the potential to add these things later.  Many of our first time home buyers are considering starting families but don’t have them yet.  So a strategy could be looking at homes with unfinished basements, where you could add bedrooms and baths later.  The point is, when buying your first home it may make sense to think outside the box.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to learn more about the home buying process, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.


Do I Really Need a Credit Approval?

Do first time home buyers really need a credit approval?  A credit approval is so much more than a prequalification or even a preapproval.  It puts first time home buyers in a much stronger position, as it verifies for the seller that you can get a loan, and also close in a timely fashion.

Why isn’t a prequalification good enough?
  A prequalification can be issued after a quick phone conversation.  So it doesn’t give the seller any assurance that you can get a loan, as the loan officer hasn’t actually reviewed any of your documentation.

What about a preapproval?  Preapprovals USED to be adequate for first time home buyers.  This is when you submit all your income documentation to your loan officer for their review.  In this case they aren’t getting approval from underwriting, they’re just assuming underwriting should be ok with everything they’ve already reviewed.  Now a days preapprovals may not be enough.

So how is a credit approval different?  With a credit approval, the loan officer underwritercollects all your documentation, and then submits it to underwriting for a FULL approval.  This makes the seller confident that you can obtain the loan, and it also makes it so you can close the loan quicker since half the work has already been done.  Sellers usually like to receive their money ASAP!

But that sounds like a lot more work for me!
  A full credit approval may be more work up front, but it’s work you’re eventually going to have to do anyways.  It also doesn’t cost you anything!  So if you can do something for FREE that puts you in a stronger position, why not do it?!?

Don’t make the biggest financial decision of your life without getting educated!
  If you’d like more information about the credit approval process or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE workshops.