by Brian Burke
on Monday, August 26th, 2013 at 11:02am.
When you buy your new home, you want to ensure that the deal does not fall through due to financing problems. With a realtor on your side, you can reduce the chance of this happening. They have ample experience in how to be approved for a mortgage which they will share with you. Even if you have a great credit history and can afford to purchase your home, there are some things you may not have considered. Follow these tips to avoid any financing problems.
A bad appraisal of a property can end up making it difficult to get home financing. An appraiser may end up saying a property is worth a lot more than it actually is, making it all of a sudden out of your price range. If the appraiser of your property is new or inexperienced, it may also negatively affect your appraisal which could change the value of the home and the amount you will have to borrow. Having a real estate agent present will help ensure you get the right value for the home and loan application. An agent can walk around with the appraiser to discuss the property and the true value, making for a more accurate appraiser.
Avoid Big Financial Changes
When you apply for a mortgage, you should prepare your finances ahead of time. Having a great credit history will help you to easily get financing for your home. However, remember that until your application is finalized, you are still under review. Avoid purchasing any other large items, like a car or furniture until after the loan is approved. Some lenders recheck at the last minute, and any other loans or large purchases will negatively affect your income to debt ratio which may make you ineligible for the loan amount you want. Furthermore, hold off on changing jobs as well. Income and job stability is important in a loan application, so you do not want to switch until you have signed the contract.
Don't Forget Other Costs
When you purchase a home, you will often have closing costs, which are not always calculated into the mortgage. They can be as much as 3 percent of the cost of the house, and you will have to have that amount to pay. An experienced realtor will be able to discuss these costs with you and make sure that you have enough money for purchasing your dream home before you have gone through the process of applying for a loan and entered into a sale agreement. You should also consider how much money you can really spend, including how big of a down payment you can pay. Discuss this upfront with your real estate agent, so that they only show you homes that you can reasonable purchase.
The real estate market is making a comeback, but you must make sure your finances are in order to get the best financing on your new home. When you find your perfect home, the last thing you want is to lose it to another buyer due to home financing problems. Working with a good agent and following these tips will help you be able to close the deal on your new residence.
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Brian Burke | Broker | ePRO | Expert | 303.955.4220 Office | 303.710.2609 Direct | Brian@kennarealestate.com