C Star Real Estate Blog

Considering purchasing a new home...that vacation spot on the lake...some acreage outside of town to build your dream home?  If so, one of the first stops you make should be your banker.  The best thing you can do is to get pre-qualified.  Going through the pre-qualifying process is relatively painless and it will certainly save you some possible heartache on down the road.

Lending requirements have become tighter in the last month or so.  Pre-qualification will give you a solid picture of where you stand relative to credit-worthiness as well as helping to answer the most confusing question of all..."how much can I afford".  Working with your financial partner early in your home buying process also helps to assure that when the time comes to sign on that dotted line and commit yourself to 30 years of payments you won't get blind sided at the closing with loan or credit issues.

I would also recommend that, as a buyer, you look at ALL financing options available to you.  FHA, often thought of as the stepchild of financing, may offer a viable alternative to conventional loan financing plans.  With interest rates as low as they are right now, 15 year mortgages may be manageable and could cut your interest costs tremendously.

One criteria that will come into play is that nefarious credit score that all those late night television advertisers tell you about.  Both conventional and FHA loans have raised the minimum scores for applicants seeking lending under those programs.  FHA minimum score is lower than conventional financing but checking early with your banker or mortgage broker, even if you have run the financial gauntlet in the last few months, is advised.

So do your homework before you step into the market.  You owe it to yourself to make sure that what is traditionally the largest purchase you will make is the right one and one that you can afford.  You know, the term afford means different things to different people.  While you may be able to "afford" a $300,000 house...it ain't much fun if you live paycheck to paycheck...can't go out for pizza and a movie once in a while cause if you do you will be short on your house payment.

So from my point of view, involve the professionals early.  Your realtor can help you with selecting a home within your price range and your banker or mortgage broker can help you decide what the price range is.  And you can do all this before you hit the market.  Knowledge is power...and knowing where you stand when it comes time to make an offer and negotiate a sales price is power you just can't do without