Do you qualify to purchase a home? If so, how much and where do you start?
Let’s break it down a bit. Let’s look at how important it is to just take a breath, look at all the pros and cons and then see how you should proceed. What is the ideal strategy for you?
You want to know how much you would qualify for and what do you need to do in order to find out.
Here are the initial steps that need to be taken:
- Make a list- make a list of questions that you would like to ask a lender
- Research lenders- Any recommendations you receive it is always good practice to research them. Learn about who they are, how long they have been in the business, do they have good reviews, etc.
- Set up a call- reach out to the lenders you’ve researched, make a list of the top 3, call and make appointments
- Explain- In as much detail as you can explain your situation and goals, go over all your list of questions and any concerns
Tip: Remember to include details such as if you are relocating, starting a new job, get paid commission or get bonuses. Other helpful areas to include are your future goals, such as, are you looking to move soon, are you thinking of potential investment properties, etc. The more information you share the better a lender can assist you in finding the right loan option for you.
After talking with the lenders you will have a better idea of who you would like to work with. Purchasing a home is not something you take lightly nor should the lender you choose to work with. You will want to know that they have your interest at heart. Think of it as you are interviewing them to be on your team. Your realtor and your lender are your captain and co-captains. You will be strategizing with them and working toward the end goal.
Tip: Here are a few questions to ask yourself as you are talking with a lender and/or to evaluate after your conversation.
- Did they answer all my questions with clarity?
- Did they give me more information than expected?
- Was I comfortable talking with them?
- Did I feel they were competent and knowledgeable?
If you answer yes to all of those questions then your next step is to decide if you want to move forward with them.
This moves you towards the next step, the loan application. This helps your lender give you those answers to “Do you qualify?” & “How much?” The only way a lender can give you the answer is to complete a loan application. Now, keep in mind a loan application is just the first step, your pre-qualification. This allows the lender to determine your deciding credit score, your debts, and liabilities. These are necessary to figure out loan options as well as figuring out your debt-to-income. Again, this is the pre-qualification, the next step is pre-approval. For pre-approval, a lender will need to look at your financials (W2s, Tax Returns, Bank Statements, Paystubs). These are crucial.
With Denver’s market, you don’t want to be underprepared. Sellers and their agents are only accepting strong offers. Strong offers consist of full pre-approvals. There are many sellers who are contingent on the sale of their property in order for them to be purchasing their next property. You may be in the same boat so you can definitely understand.
Keep in mind, this may seem overwhelming, this may seem unattainable. The question is, what do you have to lose? If you are even curious about purchasing it is better to see what your options are and if they are attainable. Taking that first step is the most important because it helps you to see the numbers, the potential and the amount needed to get your foot in the door. With housing prices still increasing, it will cost you more next year to purchase the house you wanted today.
