The process of purchasing a home can be long and full of twists and turns. Of course, having a Realtor help you through the process can help you avoid some of the pitfalls and potholes. That said……..
One of the first things that needs to be accomplished is finding out how much of a home you can qualify for. Finding a lender can be a process all in itself and it is good to get an idea of interest rates and fees from more than one lender.
The document a buyer needs to have before home shopping is a letter of pre-qualification. This is obtained by selecting a lender, chatting with them for a few minutes in which they will gather some basic financial information and check your FICO (credit) score. In Arizona, when an offer goes in on a home, we require a LSR – a Loan Status Report. This shows the seller that you, the buyer, are indeed able to purchase the home for the price on the offer.
There are many different categories of financing, ie. conventional, FHA, VA or USDA. Each of these has different requirements and once you are pre-qualified, we can narrow down the type of houses we look at depending somewhat on your choice of loan.
As a potential buyer, you need to be aware of what your FICO score is, and one piece of advice I hear over and over from lenders: Don’t make any large purchases, or apply for new credit cards – even something as simple as a furniture store line of credit can mess up, and lengthen the process. Once you have an accepted contract on the home you wish to purchase, still DON’T make any larger purchases or apply for additional credit and also, don’t move your money around. Anything that changes during the process will have to not only be fully document, but will also slow down closing.