New borrowers considering buying a home should be preparing years in advance. This 6 step process can save you $1,000’s, educate you on the types of loans and better prepare you for this extremely complicated process.
- Credit Score. See my blog post Sept. 26 “How to improve your credit score: Simple payment trick” and Oct. 16, “How to save 100’s to $1,000’s, 11 tips to manage your credit score”. You can do all this for free over months and years to improve your credit score, saving you $1,000’s in fees and improving your odds of becoming approved.
- Budget. Owning a home can be expensive and complicated, if you are not prepared. Keep it simple by having a budget and sticking to it, so you can save for the down payment, be prepared and afford the costs of a home. You will be glad you did so.
- Find a mortgage lender. You might think it is too early, but I suggest researching and finding the right lender now, years in advance. By finding the right lender, they can inform you of many loan programs which provide down payment assistance, lower down payment requirements, how to document your self employed income, down payment gifts from family, etc. This is my area of expertise and where I can save you $1,000’s in fees or rate.
- Down payment. Are you going to get a portion of your down payment from friends or family? If so, many lenders require the down payment to be seasoned, i.e. in your bank account for 6 months or more.
- Down payment assistance. Do you qualify for a program which helps borrowers with the down payment, such as a bond program or program offered by county, state, federal banks? For instance, some banks are offering a First-time Homebuyers down payment assistance program, providing up to $10,000. California has their own down payment assistance programs. Find a lender that has experience funding these loans, if the program is right for you.
- Loan programs. Get acquainted with the loan programs. If you research various programs, you may find that you don’t need to save as much money as you thought and could buy a home sooner than expected.
Mortgage lending is extremely complicated. That is why I started my business, to help borrowers navigate the process, find the right lender, compare and negotiate the best loan for them. I’m not a lender and do not offer loans, but direct borrowers to quality lenders. I’m paid by the borrower to help them reduce their costs as much as possible, looking out for their best interests and providing peace-of-mind through the process. If I don’t reduce your costs, I don’t get paid. My average customer has saved over $7,000 on their loan.