The Top Steps to Prepare to Buy a Home in 2019
Are thoughts of a new home stirring in your mind? Are you also wondering if you’ll qualify for a home loan? Before you start browsing the listings, you should take a look at how well you’re positioned to be approved for the mortgage to finance a home purchase. Alvarez Construction Company frequently works with Eustis Mortgage, a hometown lender here in Baton Rouge. We asked Anthony Williams, Eustis Mortgage’s Vice President and Branch Retail Sales Manager, to offer insight on the top steps to prepare to buy a home in 2019.
The very first item on Anthony’s list is to look at your financial situation long before you start house-hunting. “Ideally, a customer should consult with a mortgage professional six months to a year prior to wanting to buy, so we can review every facet of the process and make sure everything is in order.”
You can use this head start to work on fixing any credit issues that could impact the mortgage program you will qualify for, the amount of the loan, and the interest rate. By working with a mortgage lender early, you become more informed about your options and can shop with confidence for your new home.
Don’t guess at your creditworthiness.
“So many folks rely on credit information from unreliable sources,” Anthony cautioned. “Having a mortgage professional look at your credit report is much more valuable. They look at things like analyzers that online sources do not.”
It makes sense. You’re a person, not just a bunch of numbers on a report. A mortgage lender understands what to look for on a credit report. You have a personal consultation that allows you to ask questions, discuss strategies, and review the many paths to homeownership. Anthony said people are often surprised at the wide range of mortgage programs that are available. “Our goal is to find the program that fits the buyer, and we do everything we can to make that happen.”
Set aside the down payment and closing costs.
While you’ve probably heard you need a 20% down payment, that’s only one option. There are loan programs available with low down payments—even ZERO down! With FHA loans, you can pay as little as 3.5%. A VA or USDA home loan will finance 100% of the cost of your new home. Of course, each loan program has restrictions and you must qualify. Talk to your lender about your choices, so you can be prepared with the down payment you need.
In addition, there will be closing costs. These are fees that are paid during the purchase transaction. They include an appraisal cost, attorney’s fee, homeowner’s insurance, title search, property tax, origination fee, underwriting fee, and various others. In some cases, a seller or lender will offer to pay for a portion of closing costs. Use a closing costs calculator to give you an estimate of what you can expect.
Anthony also advises that before you use your money to pay down debt, talk to your lender. You might be better off saving that money for the down payment. Working with one of Alvarez Construction Company’s preferred lenders—like Eustis Mortgage—earns you $5,000 toward closing costs when you purchase a home from us. We offer $3,800 and Eustis Mortgage provides a $1,200 lender credit toward closing costs.
Avoid major credit situations.
From applying for credit cards to filing for bankruptcy, any event that impacts your credit rating should be avoided. Every time you apply for credit, your credit score could decrease by as much as 20 points. When you’re late on a payment or your account is sent to collections or charged off, your credit rating suffers. Be vigilant about protecting your credit situation when preparing to buy a home.
Maintain a stable work history.
The longer you stick with a job, the more stable you appear to a lender. When a new home is in your not-too-distant future, try to stay with the employment you have. Of course, there are situations like a lay-off that can’t be helped, but when a lender looks at your long-term history, this might just be a tiny blip on the radar. Working one-on-one with a lender allows you to discuss the issues that impacted your work history.
Homeownership IS in your future!
A knowledgeable, dedicated lender looks for ways to help buyers purchase a home. They know that there’s a vast array of programs and what’s required for each one. Even when you don’t qualify for a conventional loan, you might still be able to afford the home you’ve been wanting.
“There are custom-tailored mortgage solutions to create the path to home ownership,” Anthony says, adding that there are thousands of combinations. “It’s a path and make take different routes, but we do our best to bring it to the right conclusion for our customers.”
Don’t be discouraged. Instead, be prepared. Talk to Anthony or one of his team members at Eustis Mortgage. Then browse Alvarez Construction Company”s single-family homes and communities. We want to reward your hard work with the perfect home for you and your family!