When thinking about buying a new home, I know that a million things immediately come to mind. My husband and I have bought and sold many properties over the last 8 years. How much can we afford? How much will the payment be? Can we get a loan?
The first call you should make before you begin looking for you next home, is to your mortgage broker or loan officer. 
It is very important to know your financial situation before you start searching for your new home. Credit scores, interest rates, and debt to income ratios all dramatically affect the types of loans and programs available to home-buyers. It will also affect the amount of credit you have available to finance your new home.
The fact of the matter is, credit costs money. Interest rates are the means to which banks make money. The higher the risk, based on your credit scores and debt to income ratios, the more a bank will charge for the cost of obtaining credit.
Why does the credit score play such a important part in the process of applying for credit? To quote one of my favorite talk show hosts, Dr. Phil, " The best predictor of future behavior, is past behavior"
If you are consistently 5 days late on your car payment, you behavior tells the bank, "I don't pay my bills on time, so don't expect a payment from me when it's due."
Likewise, if you mail your house payment in 2 weeks early and you pay off your credit cards every month, your behavior tells the bank, "I pay my bills on-time and understand the conditions of the credit agreements I have entered into."
From an real estate agents point of view, not knowing what price range a buyer can afford to buy in would only lead me on a wild goose chase all over Plainfield and end up taking up a lot of both mine and my clients time.
You wouldn't go to the check out at the grocery store without making sure you had money in your wallet, right? The same rule loosley applies to shopping for a new home.
Lots of real estate agents would be more than happy to take you through homes for sale in your area, I'm one of them; but I can't stress enough the importance of talking to a mortgage lender and becoming pre-approved!
- Pre-approval gives weight to any, and all offers that you make on a property.
- Defines the price range for which you can obtain a loan commitment from a lender.
- Helps you understand exactly what that credit is going to cost you in terms of interest rates.
- A mortgage broker can help you estimate your final monthly payment, closing costs, and necessary down payment.
- Being pre-approved, saves both you and your real estate agent a valuable amount of time!
I have established a business relationship with Daniel Cerovac at Wells Fargo Home Finance in Aurora, IL. Dan is the branch manager there, and we have talked about the kind of service I would like to see for my clients. Dan will work with you to find a loan program that you are comfortable with and that meets your needs. If you are thinking about buying a new home, give Dan a call. You can reach him at the office at 630-820-5229, He's a smart guy and he'll take great care of you!
After you talk to Dan, call me ... we've got some house shopping to do!
To learn more about buying or selling a home in Plainfield, IL visit my local Plainfield website at: www.LivingInPlainfield.com to see what's going on in the community and about local area events!
Thanks Jacob! The trick is getting them to understand it all, right?
It was inspired by an experience I spared myself from at the last minute this weekend. Another blog perhaps?!