Home Buying 101: Step 1-Get with a Lender

Abby Husbands
Published on January 15, 2019

Home Buying 101: Step 1-Get with a Lender

If you’ve decided to buy a home in 2019, but you’re not sure where to start, sit back as I walk you through the process in Episode 1 of my first-time home buyer series now.

Today is episode one in a series of steps where I walk you through the home buying process and step number one is to get prequalified and start the pre-approval process with a fabulous lender. If you’re already working with a realtor, your realtor should have a list of preferred lenders that
they can send it over to you and usually if you have a great realtor, your realtor has great lenders that they work together as a team to help you through this home buying process. The reason that I suggest getting prequalified before you do anything else is that you want to know what your budget is before you start looking. I can’t tell you how many times clients have called me and they’re ready to start shopping for homes and
they have a much bigger budget in their head and what they actually qualify for. So when you get with a lender, they’re going to go through things like, how much do you make a year? What is your work history? Have you been a W-2 employee for a while? If you’re self-employed, have you been filing your tax returns? Are you paid on a cash basis? Do you have a paper trail? And they’re also going to consider your debt-to-income ratio (DTI) because that can affect how much you can borrow. They’re also going to look at your credit score. There are a lot of people out there that I come into contact with that have no idea what their credit score is, nor do they even know what a credit score is, and that’s ok. A good lender is going to look at all of these different points and they’re going to come up with a budget with you. Once you have that budget, you can start looking with your realtor.

There are some other things to consider too that if you’re going to be putting down a down payment and a down payment is anywhere from 3.5% if you’re going to use an FHA loan or as much as 20-25% or more and you’re using cash for that down payment, that money has to be in a bank account & seasoned for at least 60 days. If you’re being gifted that down payment, that’s great too. You just have to let your lender know. There is a whole picture that the lender looks at in order to prequalify for you.

They’re also going to look at your debt to income ratio. How many credit cards do you have? How much student debt do you have? Do you have medical bills you need to pay down? If you have a high debt to income ratio, you’re going to have to pay some of that off before you can qualify for a mortgage. Get with a reputable mortgage lender and start the prequalification process. So thanks so much for watching. I hope you found this informative. If you did, please give me a big thumbs up, subscribe to my channel and share this video with your family and friends. If you have any questions about the home buying process, you can reach out to me directly through my website, Austin-TexasHomesForSale.com, or you can leave me a question in the comments section below. *transcribed using temi.com

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