How to Take the First Step Towards Being a Richmond Homeowner
Have you been dreaming of becoming a Richmond homeowner? If you have, there is a good chance you have even begun to search online to see what is available on the market.
You want to find that perfect Richmond house. If you think you are ready to make the leap into homeownership, you want to work through the process in the right order. If you don’t have the funds to purchase a house with cash, your first step is to talk to a lender about a mortgage.
Starting With the Lender
Many first-time Richmond homebuyers make the mistake of thinking that they don’t need a lender until they have found a house they want to buy and are ready to obtain a mortgage. Doing it this way makes the process much more complicated and more likely to fail and here’s why: your lender will help you know what you can actually be approved for.
You might know how much you can afford to spend on a monthly payment, but that doesn’t mean a lender automatically wants to lend you their money. The lender will look at your credit score and history, your work history and income, and several other factors before agreeing to loan you money for a house.
Getting Pre-Approved
There are two steps you can do before applying for a mortgage. The first step is to get pre-qualified. When you go through this process, a lender is able to give you an idea of how much they will approve you for when you apply for a mortgage. However, this is not a guarantee.
The second option is to have a lender pre-approve you. To receive a pre-approval letter, you will supply your lender with information and proof of your financial situation and allow them to check your credit score. Once they do this and check other areas of your life, they will determine how much money they will approve you for when you are ready for your mortgage.
Richmond sellers like to work with buyers that are pre-approved because there is a much smaller chance that there will be problems with financing during the escrow process.
If you have a lot of debt, have recently changed jobs and taken a step down, or have a low credit score, you could be denied by the lender. They will then be able to give you ideas on how to improve your situation to obtain a mortgage in the future.
Choosing a Lender
You don’t want to just work with the first lender that you come across. Take the time to interview several lenders. Ask them about the programs they offer and which one would be the best for you. Find out what their current rates are. You want to talk to the lenders on the same day or very close together because interest rates can change frequently, and you want to compare apples to apples.
An experienced lender will help you identify the loan that is the best fit for your situation. They can also help you determine what you can comfortably afford when buying a house. Even though the process might not be as fun as looking for houses, start with the lender and the process will be easier for you as you move along.