the taxes on a property vary widely depending on location and that can make a big difference in the estimated house payment. Without a clear picture of what payments will be, most buyers don’t know what price range to search in. Also, if buyers think they are qualified for a $300,000 home and start looking at them, only to find out that they can only officially qualify for $225,000, they are seldom satisfied with the type of home they are “settling for”. By knowing the proper priced home to look for from the beginning, you can avoid some disappointment. Shannon Katz, a local loan consultant with Loan Depot says that “the first step when working with me is to ask general questions about the buyer and their situation and then recommend loan programs that are available and answer any questions they may have about the mortgage process. Once all of a buyer’s general questions are answered, and a loan type is selected, I can get more specific. At that point, I will discuss in detail the loan program itself, credit score requirements and down payment needed, if any.” Shannon notes “I think this is where having a local lender makes things easier because you can have someone that can meet in person, and answer your calls at night and on weekends.” Once buyers have a pre-qualification or preapproval in hand they can begin looking for homes based on the type of loan and amount of qualification. If you are looking for a USDA eligible loan, your agent can help make sure the homes you look for are in an area that qualifies for that type of loan. If you want to pay county only taxes to keep your payment down, again, your agent can help you search for homes that meet that criteria. Without knowing your loan type and purchase price, you can waste valuable time searching for the wrong house for you. Once you begin the home search process, Shannon says it is vital that buyers keep their mind on their credit. “Buyers should not change jobs, make large deposits or have their credit pulled during the loan process”. Buyers should not cosign for anyone else, open credit card accounts or buy anything over $5 without talking to your lender first! Maybe that is a bit of an exaggeration, but - not really. We have seen home loans denied because of a buyer have a 700 credit score, they go off of that. If you tell them that you earn $5000 a month, they plug that in. Lenders can give you an idea of the price of home you can be shopping for based on this information. “Pre-approved” is a different thing. If you are said to be pre-approved, the lender has actually run your credit, they have verified your income and expenses and done a much deeper dive into your finances. Sometimes buyers don’t realize what items can “count” toward official income and which cannot. It’s important to be upfront with your lender from the beginning so you don’t run into any surprises later! 29
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