Essential Strategies for Navigating Loans, Surprises, and Securing Your Dream Home
Every prospective homebuyer, whether experienced in the processes and nuances involved, or new to the entire procedure, needs a plan. The plan includes a road map from first look all the way to closing. Even with a plan, there are always surprises along the way, and the surprises are best dealt with by honest and open communication among all the concerned parties. These parties may include, at the very least, a lender, and its representative, a loan officer, realtors, appraisers, closing agent, and possibly an attorney.
The prospective buyer first of all needs to understand the process. Usually, the process begins with preparing for submitting a loan application and should start well before the loan application or pre-approval. Before the prospective purchaser can move forward, he or she must gather information – for example, what documents and other information might be required? It is standard procedure for lenders to request at the very least the following:
- Two years of employment history
- Pay stubs for the past 30 to 60 days
- Two years W-2s
- Asset statements – bank and investment statements
- Gift letter if a family gift is being used as the down payment
- Other documents such as alimony or child support, if applicable
In addition, a lender might request additional information, which might include credit scores and risk tolerance. The prospective purchaser’s risk tolerance includes information about his or her financial situation, current bills and other debts, bills anticipated post-purchase, and long-term financial goals. The prospective homebuyer should have a realistic understanding of what monthly loan payment fits within his or her budget, and how that obligation would allow the homeowner to maintain other areas of their financial goals, such as family needs, education plans, insurance policies, and retirement goals.
Home buyers generally choose a home based on location, plus desire or need. True need is not determined by wishful thinking or daydreams. Rather, it may be motivated by such realistic factors as proximity to work or to convenient transportation, remaining in a particular school district, or being near extended family, healthcare facilities, or even recreational activities.
Rather than focusing on obtaining the largest loan, or the most attractive home, new purchasers in particular should focus on the investment value of maximizing capital and financial security, while at the same time minimizing risk. Of course, there is an intangible value as well in creating a family home in pleasant, attractive surroundings.
WES DEAN
Mortage Specialist
753 Nichols Ave.
Fairhope, AL 36532
(850) 516-2709
www.primeres.com/wdean
