The question often surfaces: What should I do first when I start thinking about buying a home? And I say 'start thinking' because people start the process and stop the process many times.
In this start and stop process, interest rates go up and interest rates go down. The interest rate will have a huge impact on what amount you will be able to borrow/spend on a home.
There are other factors like debt to income ratios, etc. Your lender will get you involved in D/I ratios.
However, the first item on your agenda should be to start a list of (minimum) three lenders to get pre-approved--start with your own personal bank.
Make an appointment with each, get to know each person on a a one to one level. If you don't understand something, ask the question until you have a full understanding of what the lender is talking about.
Note: This process is the Pre-Qualification/Pre-Approval process - not the Approved process. There is a difference. Pre-Approval vs. Approved, there is a difference.
Next. Fill out their required application information.
After the lender has had a chance to review your application, and if you qualify, ask them for a copy of their Good Faith Estimate (GFE) and your pre-approval letter. The GFE dollar amounts will vary from lender to lender and with interest rate fluctuation, charges, etc.
After you have spoken with three lenders and each has given you a letter of pre-qualification and GFE, sit down and review the documents.
During your process of interviewing lenders, you'll probably feel more comfortable with one of the three.
Take all three GFE's to the lender you feel most comfortable with. Show them the GFE's and ask them to explain all the information.
For example, ask them to explain the charges. Ask if they are necessary, ask if they can beat their competitor's offer, etc.
By comparing all offers, having competing offers, you should be able to get the best available rates and charges in the market place.
Why?
Because you've gotten involved, gotten educated, you understand the process, the charges and how 'things' work.
Every lender should be willing to supply you with a GFE.
Remember, interest rates can change many times a day. This change will have an effect on the GFE amounts, however, this information should give you base numbers to start working from.
Keep yourself updated and in contact with whatever lender you choose to do business with.
Hope this information helps.
Wes Nygaard - The Muljat Group - www.WesNygaard.com - www.WhatcomCountyHomeSearch.com 360.201.1844
