If you’re ready to start your house hunt, it’s important to make sure you’re able to finance your new home. Careful planning before you start will make the process of actually making an offer and purchasing a new home flow more easily, reducing some of the stress that can go along with such a big and important purchase. Here are some helpful tips to ease you on the way.
Start by determining your budget. This requires a clear understanding of your finances as well as keeping in mind additional costs associated with owning a home, ranging from down payments to property taxes. Calculate your debt to income ratio, aiming to keep it around 30% or less to give you the best chance at financing.
Once you have a budget in mind, the next step is to apply for mortgage pre-approval. This not only gives sellers confidence in you, it confirms that lenders are willing to offer you the amount you need to purchase a home in the range you’re considering. If you’re interested in working with a builder, talk to their preferred lender for potential incentives, as well.
With your pre-approval in hand, it’s time to find your brand new home. We offer a range of well-built homes in attractive communities, so let us help you find the right home for your lifestyle. Once you do, then it’s time to officially begin the loan application process. Be ready to show residence history, employment history, and bank statements among other financial documents. As well as providing verification of your financials, you’ll need a home appraisal, and proof of homeowner’s insurance.
Interest rates can fluctuate, so try to lock in a rate for your mortgage that you’re comfortable with before closing. Locking in a rate can give you peace of mind and avoid unwanted increases throughout the life of your loan. Should rates fall drastically, you can always consider refinancing.
Once all of the documents are gathered by your loan processor, they’ll be given to an underwriter for final review and decision making. The loan approval is based on: income, assets, financial obligations, credit report, and the property value.
Once approval is granted, it’s time for the closing. Make sure everyone on the loan is there for the closing, have an official ID with you, and make sure your escrow company has the necessary information for the money transfer. Once all of the documents are signed, you’ll be the proud recipient of the keys to your new home.
If you’ve begun the process of determining how to finance your new home, contact D. Erikson Homes today and let us help you find the ideal new home for your budget and your needs. Let’s get started!
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