There are few things in life as stressful as purchasing your first South Pasadena. Tips for first time South Pasadena homebuyers was created to help prepare you with the knowledge needed to buy your first South Pasadena home, today you’ll learn more about mortgages and the difference between a local mortgage broker and a national company.
This blog will also give you an in-depth look at getting prepared for the home purchasing process, and assist with relieving some of the tension that you may feel as you venture towards putting together and writing offers.
Ready To Go?
Now that we have a better understanding of the process, let’s help you figure out how to get started down the home buying process path. Let’s go a bit deeper and get into the details involved throughout the mortgage process. The information below should assist with you with feeling more comfortable about your options and help you approach the real estate market with a breath of fresh air as an informed homebuyer.
Lets Begin! Shall We!?
In order to purchase a home in South Pasadena, you will need to know how you are paying for it. Since this will most likely be the biggest monetary transaction in your lifetime up to this point, there is a high chance that you will need to get a mortgage to pay for your first home.
Every South Pasadena Realtor has had those buyers who send them a list of homes to look at prior to even thinking about this step. Yes, it does happen frequently. Individuals want to go out and look at homes before they deal with their finances because previewing homes is much more enjoyable than talking to a mortgage lender, but it’s not the correct way to begin.
First Things First!
Our South Pasadena Buyers Agents say you will need to get a mortgage lender who is highly skilled, clearly understands your financial situation, and is simple to work with. You will be communicating quite often with this individual over the period of time that you are under contract to buy a property, so it’s essential to get someone who is professional, experienced, and most importantly competent.
Most South Pasadena Buyers Agents should be able to offer lender referrals. That’s mainly because delayed closings are a nightmare for South Pasadena Real Estate professionals, and our clients.
In South Pasadena, individuals generally tend to prefer local mortgage lenders, because they are more accessible and can typically close right away. A handful of our local lenders have underwriters in the same building, and the loan file only goes through a few different people throughout the course of the transaction.
Why Is That Essential?
National mortgage companies are known for being hard to deal with because the file can go through a handful of people’s hands, making the probability for a closing delay much higher, and that’s good news for nobody!
What Do I Do?
Do your research and get a lender with outstanding reviews. Ultimately, it can aid in strengthening your contract offer, as opposed to using a national lender, because the South Pasadena listing agent won’t be as concerned about closing on time.
We just had a buyer’s loan almost rejected four days before closing mainly as a result of the buyer having a handful of forms of income, and the national loan company couldn’t figure out how to get the loan approved.
Our South Pasadena Buyers Agent suggest that a handful of first time homebuyers are scared to talk with a mortgage lender, so they put it off until the last minute. In reality, South Pasadena Buyers Agent, mortgage lenders would be more then happy to close a loan for you. An exceptional lender will do everything that they can to help you save money while purchasing a home.
Always remember that you are paying the mortgage company for their services. You will have closing fees, most likely in the thousands of dollars, which you are paying to your selected mortgage company for generating your loan. It is generally a bad feeling to work with someone who is nice at first, but turns out to be difficult to get a hold of and bad at communicating crucial details, (such as multiple forms of income could be an issue unless we submit the correct documentation).
Ultimately, at the closing table, you will be giving the mortgage company a substantial amount of money for preparing your loan. Our South Pasadena Buyers Agents say you want to work with someone who you feel deserves this money. There are some wonderful loan officers out there, as well some terrible ones. The loan officer that you choose can make or break your home buying experience.
It Gets Better!
The next step is to figure out your price range. This is a crucial step to take before looking at homes online. Our South Pasadena Listing Agents say that you need to be smart when determining how much of a financial burden you are willing to take on when purchasing a home.
Our South Pasadena Buyers Agents say that just because you are approved for a specific amount does not necessarily always mean that is your price range. Look at your finances and determine how much you are comfortable spending per month and work backwards from there. Everyone’s lifestyle is different.
If you have expensive taste and enjoy hobbies and activities such as skydiving or scuba diving and you purchase the maximum amount of house that your mortgage company will give you the opportunity to move forward, chances are that you’re going to be strapped for cash when you want to do those extra things.
Do you like to go out to dinner every night or cook at home? Do you enjoy building a savings account for the future or do you already feel you have “enough” in the bank?
Spending up to your top limit is known in the industry as being “house poor.” Sure, you may have an amazing house and your friends and family will be impressed, but will you be financially tethered to it and unable to afford other things that you enjoy in life? For some people, this is okay as they spend all their time at home anyway.
Our South Pasadena Buyers Agent say that you need to make sure to assess your personal situation and determine where you want to be financially BEFORE you have signed the papers for your mortgage. Share your thoughts and feelings with your mortgage lender. They clearly understand just how important those personal sentiments are, but only if you are open to discussing that part of your life.
Knowing your price range is also crucial when looking at homes online. If you begin looking at homes in the $800,000 range, but you are only approved for $650,000, your going to have a hard time with what you see available on the market when you come down to that price.
Every $50,000 marginal price increment has a variety things to offer. If you begin your home search in the price range that you are actually going to purchase a home in, then you will not have to deal with the disappointment after comparing your home to those in higher price ranges. You can work your way up to a higher price range in the future, but start off in the price range where you are going to live right now. This is a much better way to search for a home.
Ready To Go!
Once you have figure out your price range and discovered the mortgage lender you want to move forward with, always remember to provide your South Pasadena Realtor with your lender’s information instantly. Additionally, a lender should write a property specific pre-approval letter for the particular home you’re going to write an offer on and NOT provide a general or generic letter.
The reason? Why would you want to alert a seller that you are over qualified for a home you wish to write an offer on when you’re attempting to negotiate the best price possible?
It’s simpler for your lender to provide a general letter stating a loan amount but that might not serve you well when it comes time to negotiate whether you are slightly higher or lower than the figure on the letter with respect to the actual loan amount indicated on your written offer to purchase.
Your lender can have it handy as you go through the process and just add the fresh date and address. Sure, it’s a bit more work but it gives you an opportunity to stay in touch with your lender while you’re shopping for a home. As you may already know, rates can alter over a period of months while shopping and that can affect your qualified loan amount.
The letter presented with your offer is the written proof that you are a legitimate homebuyer. As South Pasadena Real Estate Agents, we are always impressed by first time homebuyers who email me that they are formally pre-approved to purchase and can provide me with their lender’s contact information so we can request a pre-approval letter, when the time is ideal. It shows maturity in how proactive they are as legitimate homebuyers.
When you have found the house that you want to purchase and are ready to put together a written offer, your pre-approval letter will need to accompany the offer. If you have not yet been formally pre-approved by a lender, our South Pasadena Buyers Agents say that your offer may get held up waiting on the letter and in a situation with multiple offers, this can be a deal breaker.
Since you have already met with and chosen your mortgage lender and provided him or her with all of your qualifying information, go ahead and get this step taken care of right away. As a South Pasadena Realtor, we don’t take an offer seriously from a buyer if I represent the seller unless it’s packaged with an approval letter along with proof of funds (POFs) for the deposit and down payment.
It’s crucial to remember that there is a drastic between a pre-qualification letter and a pre-approval letter.