Hi, it’s Dave Holland with Veterans National Mortgage.
The first thing that you want to do to get ready to buy a new home is to find a loan officer or a mortgage advisor, the mortgage advisor or loan officer is going to help you navigate the mortgage process on what you need to do in order to get prepared to buy the new home. A lot of people fall into the trap of not finding the loan officer first and starting to look at homes first.
And we all know homes are very pretty and we love to look at them and we want to see them and go in them. But don’t crush your dreams of being able to buy a new home by trying to go see the home first without knowing how much that you can purchase. Really you don’t know without having a loan officer look at your financial documents, whether you could purchase a home for $600,000, $700,000, $800,000.
You’re not sure how much you can purchase until somebody looks at those documents and tells you how much you can afford the first. After you find your loan officer. You want to go through and evaluate your credit. Look at your credit depth.
“A lot of people fall into the trap of not finding the loan officer first and starting to look at homes first. “
What is on your credit, how long does it go? What is your debt ratio? In your mortgage process, the lender is going to determine your debt ratio, depending on how much debt that you have going out monthly, versus how much you have coming in for income. But what that means is if you have student loans, child support, or alimony, or any other type of debt that comes out monthly, that’s going to be counted against your debt or debt to income ratio.
Once they look at your credit and your debt to income ratio they will make a determination of okay, this is how much I have to spend on this home and this is how much I have coming in. Do we need to make adjustments? Do I need to pay this credit card down? Or that credit card down? Do I need to sell my car? What do I need to do in order to be able to qualify for more home if that is the case.
Some people don’t carry any debt and that’s wonderful. For those of us that don’t have that option, you want to make sure that your monthly payments, you have the ability to afford the home that you truly love and want to get cash or bank statements what is in your bank at the time that you want to purchase. Where’s your downpayment coming from?
“If you have student loans, child support, or alimony, or any other type of debt that comes out monthly, that’s going to be counted against your debt or debt to income ratio.”
At the mortgage process, these questions are every all the questions that the mortgage advisor is going to ask you maybe you have $50,000, but it’s at home in a safe. That is something that needs to be addressed up front before you start to look at homes because the underwriter for your loan is not going to accept that you have $50,000 in your safe, although that’s very cool. They want you to source that money, meaning they want to know where it came from and where it is.
This is very, very important. When you go to make an offer on a home in your mortgage process, you’re going to have something that’s called EMD, or earnest money deposit. Your earnest money deposit is a good faith deposit. It’s usually a percentage of your purchase price. That money needs to be sourced as well. They need to know where that is coming from. So the underwriter is going to ask okay, you have $10,000 earnest money deposit, where did that come from?
If you show a cash deposit of $10,000, just before you put your money down for earnest money deposit, it’s going to create issues. So make sure that you give that’s why your loan officer is going to ask you for two months bank statements so that they can see where that earnest money deposit came from, and source it correctly
“Your earnest money deposit is a good faith deposit. It’s usually a percentage of your purchase price. That money needs to be sourced as well.”
This seems to be like common sense. But it happens very, very often while you’re looking at home during the mortgage process of being an escrow to purchase that home. And even at the end just before you close, you don’t want to make any large purchases.
This is for a couple of reasons. A, you don’t want to pull your credit a bunch of times while you’re looking for a home. And B, you don’t want that payment to show up and affect your debt ratio. If you go out and buy a new vehicle for instance, and that vehicle is $500 a month, that $500 a month could make or break you getting a $500,000 house or having to go find something for 450 or 425. So you want to make sure that if you have large purchases like that Put those off to the end. That’s very important.
Once you find your loan officer, he tells you hey, you guys are good to go, congratulations, you are pre-qualified for this amount of money. That’s wonderful. Now you have your pre-qualification in hand, it’s go time, you can start shopping for your home. Now you want to know what do you do now. At that point, the next step is you’re going to want to find a real estate agent, they kind of go hand in hand, a real estate agent is going to help you find properties, help you navigate the documentation that’s required for you to be able to purchase the property, and then help you negotiate a good price. So you guys can get a good deal on the property.
“Congratulations, you are pre-qualified for this amount of money”
Once you find the real estate agent, and you start to look at properties, they will start to send you properties online, you’ll be able to go view properties by appointment, or they’ll set up a time to go view the property. If it’s vacant, then you’re going to make an offer on the home. When you’re making an offer on the home. The real estate agent again is going to ask you how much what type of loan that you’re going to do.
What earnest money deposit are you going to put on the house, and what time of what kind of timeframes you’re working with. All those are very important factors. You then submit your offer to the seller. If your offer is accepted. Congratulations
Now the hard from mortgage process work starts once your offer is accepted by the seller. Now it’s time for that lender to get to work on his side for your real estate agent to get to work on their side and make your deal happen. So you now have an idea of what you need to do to prepare in order to purchase your dream home.
We have more information on our website at veteransnationalmortgage.com click apply now, for a free interest rate, quote, and pre-qualification that does not affect your credit (pre-qualification with no credit pool).
Our team is excited to help you with your dream home.
Or you can call us directly at (888) 922-2022
We’ll see you next video.
You may also be interested in knowing about how much home can I afford >> HERE <<
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