Buying a house can be a long and stressful process, and many people make it more stressful by not getting their financing in order before they begin their search. One of the most important things to do when you’re looking to buy a house is to get preapproved for a home mortgage. Getting this vital piece of financing out of the way early will save you headaches down the line, and it comes with some considerable benefits as well. The sooner you get your home loan sorted out, the sooner you can enjoy your new life in Chevy Chase.
Unfortunately, much like the rest of the home-buying process, getting a mortgage is not simple. You’ll have a lot of hard work to do financing for and obtaining that preapproval, but the end result is definitely worthwhile. If you’re looking to buy a new house, here’s what you need to know about financing for a home loan.
Meeting the prerequisites
When you’re preparing your financial records for a home mortgage, it’s essential to know what your prospective lender will be looking for. Generally speaking, there are five key things a lender will be looking for when they consider signing a preapproval letter. These include both proof of income and proof of employment. Verifying these things will give the lender confidence that you’ll be able to pay off the loan they give you. Similarly, a lender will also need proof of assets.
Your bank and investment account statements should be able to demonstrate that you can cover down payments and closing costs, so it’s important to have that financial paperwork in order and ready to show before you get serious about seeking pre-approval. You’ll also need a good credit score and additional documents like your driver’s license and social security number. Getting all these documents in order early is absolutely vital when you’re looking for preapproval on a home.
Choosing the right mortgage for you
There are two types of home loans that you can qualify for: conventional loans and FHA loans. The former are generally harder to qualify for, as they come with stricter requirements for approval. They also tend to have a higher down payment than FHA loans, though this is not always the case. However, in order to qualify for an FHA loan, the house you’re buying needs to be your primary residence. If you’re looking to start a new life in Chevy Chase, an FHA loan might be a good choice for you, but if you’re looking to invest in multiple properties, you should look to conventional loans instead.
There are also fixed-rate and floating-rate mortgages to choose from. The former, as the name suggests, sets a stable interest rate that does not change for the entire duration of your home mortgage period. If you know your income won’t be changing anytime soon, this is a good fit. Floating-rate mortgages, on the other hand, start at a lower rate and then increase over time. This lets you get a lower interest rate to start with and qualify for a higher-value mortgage than you might be able to obtain otherwise. But if your income is not expected to rise over time, it’s a much riskier option and another thing to keep in mind when you’re financing your home loan. For all the luxuries it offers, Chevy Chase real estate isn’t cheap, and you’ll want to make sure you’ve got a loan that will let you hold onto that dream home without fuss.
Working with a good Realtor
Getting preapproved for a home mortgage is a very complex process, and it’s easy to feel overwhelmed. That’s why, if you’re serious about getting a new house, you should contact a good Realtor. An experienced Realtor who’s familiar with the Chevy Chase area will be able to give you expert advice in reaching out to a good lender and guiding you through the most difficult parts of the home loan application process.
A good Realtor will be very familiar with the benefits of securing a preapproved mortgage early. Most sellers will be much less likely to show a house to someone who hasn’t been preapproved for a loan, preferring the security involved in working with someone who’s guaranteed to be able to buy the house at the end of the day. Having that preapproval in your pocket will also give you a good idea of the budget you have to work with when you’re shopping for houses in Chevy Chase. That peace of mind will be a huge benefit when you get into the meat of house shopping.
Working with a good real estate agent to get your finances sorted before preapproval can also help you sort out your overall financial situation and resolve any lingering problems dragging down your credit score. Doing your finances in advance of a home purchase might not be the most fun part of getting a new house, but it can have serious benefits at every step of the process.
If you’re serious about getting preapproved for a home loan and securing your very own home in Chevy Chase, the first thing you should do is reach out to a qualified Realtor. The team at Argent Realty is an excellent choice. Over 20 years, they have become industry leaders in the Washington Metro area, and building long-lasting relationships with their clients is at the heart of their mission statement. Reach out today to get started.
