Home shopping? That’s the fun part. Loan process? That’s … not so fun. Even though the loan process comes with a learning curve, we don’t believe it has to be painful. You just need the right people on your side.
Mortgage loans are designed slightly differently from other types of loans. The value of the home backs the loan – that’s the easy part. It gets a little confusing navigating the types of loans, however: how they work and which one is best for your needs. But that’s what Dash Home Loans is here for. We’re your partner in this process, giving you the information you need that gives you the confidence to choose wisely.
Are you ready to buy a home? Reach out to Dash Home Loans now. Let our Mortgage Consultants help you start the process. If you’re doing preliminary research, read on. Here’s what you need to know and what you need to do to get the best possible results.
We hear it all the time: Buying a home and building equity is the best way to accumulate wealth. It’s the American dream, right? We need to add an important caveat: In order for homeownership to create wealth, it needs to come at the right time in your life. Time your home purchase well to set yourself up for success. Here are five financial signs you may be ready to take the leap:
Is your credit score not as high as you’d like? Is your down payment too small? Don’t assume you’re not ready to buy a home. Call us and we’ll take a holistic view of your financial readiness and give you a realistic assessment. We don’t want you to hold yourself back unnecessarily. We have loan types for all kinds of buyers, and we pride ourselves on matching the right buyer with the best loan for them – even if they have a low down payment or borderline credit score. Learn your options from the professionals to make your savviest decision.
You can probably guess how we’ll answer: Buy, buy, buy. Not necessarily! There are good reasons to choose renting over buying. Do you expect to move or make a big relationship change within the next couple years? Rent. Do you value flexibility over all else? Rent. Are you struggling to establish savings? Renting may be better. When you buy, you no longer have a landlord to fix leaky pipes or a broken air conditioner – you’ll need a fund for maintenance and home emergencies.
If you’re at a stable point in your life – when you don’t foresee changes in your career or location – home ownership may be for you. If you value roots over flexibility, it may be time to buy. For the right person at the right life stage, purchasing a home may become the investment of a lifetime.
This answer is an easy one: Always start with a mortgage company. Always. When you have that pre-approval letter in hand, real estate agents and sellers will know that you are a qualified, serious homebuyer. Often, you can’t even look at a home or make an offer without this letter. The pre-approval process will also help you understand your appropriate price range, which could save you a lot of time during the home-shopping process.
With DASH, we can help you with both. Not only can we get you pre-approved (and you do know about our $10,0000 closing guarantee, right?), we can also link you to a trusted realtor when you’re ready. You and the realtor will have all the information you need to shop confidently.
You have options about the mortgage companies available to you. Learning about your lender is important – it sheds light onto their business practices and the types of service you can expect. Here are some key areas to focus on when comparing mortgage companies.
While this does not define the quality of a company, it can make a difference in the type of experience you have. Both local and national mortgage companies are likely available to you. Local lenders are those you can visit in person to meet with and handle the transaction. National lenders may have local agents, but other times the transaction is handled online until the closing process, when you’ll meet with a title agent.
Finding a reliable mortgage lender – one that you can connect with and trust to help you with the process – is crucial. There are a few places to look for this type of lender:
Once you find a few contenders, take the time to reach out to them to inquire about the services they offer. Ask for a consultation. Then, take a closer look at these important factors:
When you learn how to buy a house, one of the most confusing aspects could be this one. Not every person on the phone with you will be a lender who can offer you a loan. There are several people you could be working with, such as:
That’s a lot of people – and that means a lot of potential risks. At Dash Home Loans, we get rid of this confusion. Our Mortgage Coaches replace all of these individuals. You have just one person you have to talk to and discuss your needs with for a home.
Now that you have a lender, pre-approval comes next. You’ll usually do this about 30 days prior to the closing on the loan. We recommend working on this step quickly to ensure that you can start bidding on the home of your dreams.
To obtain pre-approval, you’ll need to submit information to the lender. Your online application is the first step. The goal is to provide accurate and complete information so that the lender can easily go through and verify it. Your lender is looking at your income, credit, employment verification, and other steps to know exactly what your credit qualifications are.
This part is often the quick one. You can usually have a pre-approval letter within one to ten days of submitting your application.
Once you submit this information, the lender will provide you with a detailed loan offer. This will outline what you can expect to pay to buy the home. It will include details about:
The lender should make all of this information clear and easy to understand. Having questions at this stage is completely expected, so ask about anything that seems confusing. This is a big deal (and a lot of money!), and it’s important that you understand and are comfortable with the details.
Once you start to look for a home, you’ll want to have your pre-approval in place. You will find that many home sellers like to hear you’re pre-approved because it means the transaction will move ahead quickly. It can be a negotiating tool for you if other would-be buyers do not have pre-approval.
To prove this to them, you can provide them with a copy of a pre-approval letter. It is a simple document that states that the lender has verified your financials and is willing to lend to you once you find a home to buy.
Pre-approval is not a guarantee of a loan. It means the lender has verified your information and has made a loan offer to you. They have provided information to you about the fees and costs to borrow from them (which you agree to). In addition to this, they also commit to lend to you, as long as none of the information you provide changes – and assuming the home meets their requirements.
It’s time for the fun part! Now it’s time to find homes that interest you. When you find one that you wish to buy, you can then make an offer. An offer is a legal contract you must stand behind, so make sure you’re serious about the purchase.
Good news: It’s a good step toward buying your home. Bad news: There’s still a lot to do. (Sorry.) One of the most important first-time home buyer tips is this one: Always work with your lender hand-in-hand. When they ask for information, provide it in a timely manner. Stay in contact with them throughout the week to check off a few key things, including:
Once you have a home to buy, and you have worked through the details with your lender, the real estate closing process begins. You may work with a real estate attorney during this process, who will draw up the contracts, including purchase agreements, mortgage documents, and title agreements. Some states require that a real estate attorney be a part of a real estate transaction; other states allow buyers to handle this themselves. (A note of caution: Handling this portion of the sale yourself would require a lot of knowledge of real estate law.)
Your real estate agent can refer you to a real estate attorney who will help you in the closing process.
Before you can close on the home’s sale, you will need to talk to your insurance agent. Your lender will require that you have a home insurance policy that is ready to go on the home. Insurance helps the lender know the home is protected, in case a covered incident, like a fire, should occur. Within your mortgage contract will be a requirement for you to maintain your insurance policy to at least the value of the loan. Insurance policies are good investments because they protect your investment.
Your mortgage lender may offer recommendations on a home insurance company if you do not have one. Shop around for a comfortable insurance rate and be sure you purchase coverage that reflects your needs.
Home warranties are an added benefit to buying a home with certain real estate agents. The seller may provide a home warranty to the home buyer at the time of the transaction. They often do this – at no cost to the buyer – as a way to encourage offers on the home. Warranties differ widely, however. That means it is very important for you to know what type of warranty you are getting and the terms of it.
If the seller does not offer one, and the real estate agent does not, you can purchase a home warranty separately. If you consider this option, be sure to review what you are buying and the cost to you. Often, these warranties will provide financial protection for you that covers larger systems in the home from costly repairs.
As you can tell, a lot can go poorly without a good partner guiding you through the process. A home is a big investment – likely your biggest investment. Every step of the way, you want to ensure you have the very best team by your side to support you as you buy a home.
If you’re a first-time home buyer evaluating lenders, contact us to hear how our Mortgage Coaches can help you. Ask us about our $10,000 wager that your home will close as expected (warning: we don’t expect to pay up because we’re that confident in our process!). We’d love to tell you how we can guide you through the tricky parts toward the best one: Walking into your very own home.