You have decided to pursue the American Dream of homeownership. First, congratulations! As you may have heard or read somewhere, you need to find the home of your dreams and then apply for a mortgage to pay for the thing. This advice is absolutely and fundamentally wrong! In reality, you should pursue the process in the exact opposite order.
Let's assume you find that dream home or at least a starter home you are comfortable with. Most first timers immediately get that glazed look in their eyes where they start visualizing the placement of their furniture. Next thing you know, they have made an offer on the property. If the offer is accepted, they are ecstatic until the suddenly realize they have 30 days or so to get a mortgage lined up. They then race off to a lender and pray it all comes together in time. Taking this approach is extremely stressful and you should avoid it if possible.
One of the simplest, yet most effective, mortgage tips is to focus on timing. In this case, I am referring to the timing of the application for your mortgage loan. Simply put, you want to apply before you ever go house hunting. This process is known as getting pre-approved for a loan and it will make your life so much easier.
The advantages of getting pre-approved for home loans are many. First, you are under no deadline related to the purchase of a home. If there is a problem, you can deal with it in a calm, mature manner. Second, you know exactly what you can afford when you go house hunting because the bank will have already told you. Third, you are going to be far more attractive to sellers because you already have your financing lined up. This makes them more comfortable because there is one thing less for them to worry about. You can also use this to your advantage by negotiating a better deal with them.
If this is your first time buying a property, you can make life a lot simpler for yourself by getting pre-qualified by a mortgage lender. Once you know what you qualify for, you can get out there and shop till you drop for your dream home.
