As the last year has certainly taught us - times are strange. Inventory is lower than I've ever seen it, and when a house comes on the market - its often getting multiple offers within
Buyer Tip - When to Start Working with A lender (hint - earlier than you think!)
Dated: December 17 2020
If you are looking to buy a home sometime in the next year, you should reach out to a lender. I have several I can recommend (and please - go with someone that a Realtor recommends, and not just calling a number on a commercial) but today I interview one of my very favorite to work with, Jeff Schneller of Corby Mortgage!
It is never too early to start a conversation about the home buying process, but in generally I suggest potential buyers contact a lender 30 - 60 days before they plan to stat their search. Just because you contact a lender doesn’t mean you have to pull credit and most lenders do not charge for consults.
Why is important for buyers to talk to a lender early in the process?
The main reason to start early is to allow time to correct any errors on the credit report or for the lender to make suggestions to improve score so they qualify for the best program and rate available.
Is there anything helpful for a buyer to do BEFORE calling a lender?
The pre-approval process includes pulling a credit report, documenting a 2 years job/income history, and documenting assets. Before contacting your lender it would be helpful if you know your social security number, income, and asset information. If you ae self-employed it would be helpful to have your last 2 years tax returns available.
Some people think they can't afford to buy a home because they don't have 20% down payment in the bank. What are some other options for people?
There are so many options for buyers that do not include having a 20% down payment these days. This old rule of thumb is out dated. In my opinion, the most important thing is affordability.
Here are some options which do not require 20% down:
· VA Loans requite 0% down payment.
· FHA Loans require a 3.5% down payment.
· Conventional loans require a minimum down payment of 3%.
If you have less than 20% to put down you might have to pay Private Mortgage Insurance or a Mortgage Insurance Premium. The monthly amount of this insurance can vary based on program, credit score and down payment percentage. Years ago this insurance was very expensive but is now very competitive. Your lender can provide you quotes and I often surprise people with actually how little per month PMI is.
What is the best thing potential buyers can do to improve their credit score?
Besides paying your bills on time the best thing a potential borrower can do is reduce their overall debt to credit limit to under 50%. For example, if you have a credit card limit of $1,000 always keep your balance under $500 or 50% of that limit.
Jeff Schneller|NMLS ID 217765
Chief Operating Officer
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