ReneeHuse Stopp!!!

STOP!!! Don’t start your home purchase with falling in love with a property!!

Are you contemplating purchasing a home without a Mortgage Pre-Approval?  Stop.  I mean it. Stop RIGHT THERE!

And just one more question: Did someone give you a mortgage pre-approval WITHOUT looking at all your financial documents?  Did they pull your credit report?  (Ok, I lied, that was two more questions.)

Several times a week I have conversations with young home buyers who have started the home buying process in the wrong order, and without the necessary education to make what could be the largest purchase of their lives. Purchasing a home starts with understanding your financial situation, and where you’re ultimately headed with regards to your goals.  It doesn’t start with falling in love with a property you can’t afford, stretching to purchase what may very well be a bad investment and being house poor for the next 25 years.

Here is how the process should work:

  1. Start tracking your monthly spending.  Get comfortable with where your money is actually going.  (Just saying, “into a black hole” is NOT the answer we’re looking for here.)
  2. Set some kind of a budget.  Be realistic about how many times you want to eat out each month, buy concert tickets, designer jeans, and indulgent expenses for your family.  Track what you actually have left over at the end of the month.
  3. Meet with a mortgage professional.  This should include participating in some financial education and working through a pre-approval.
  4. Ask your mortgage professional to explain your credit score, your down payment, your debt coverage ratios and what they all mean for your purchasing power.
  5. Understand the terms of the mortgage options available to you.  Don’t get hung up on rate people – it always ends badly!

All done? Congratulations. If you have firm understanding, and acceptance of your budget, and have researched the mortgage options available, you can start looking for a house!