How difficult is to get a home loan today?

Getting a loan payment you can live with is as important as finding the right home on Bainbridge Island. While finding a local lender is an important initial step in the home buying process, here are a few more tips that will help you take down that “for sale” sign in front of that home you want to buy with a lot less stress.

Get pre-approved. Do you really know what you can afford and, more importantly, if you qualify for the lowest interest rates? One of the worst things you can do is get your heart set on a house only to be told you won’t qualify. That’s where getting pre-approved by a local lender is crucial.

Why a local lender? Sellers and their agents look more favorably on pre-approvals that come from someone they deal with all the time, someone they know and they trust. Having a letter puts you in a better position to make a serious offer when you do find the right house. Remember that a real pre-approval is more than a cursory review of your finances: pre-approval from a local lender is based on your actual income, debt and current credit history and scores. When a Bainbridge Island-based lender does a thorough analysis of your actual buying power, you’ll gain peace of mind knowing that you can afford the home you make an offer on.

Consider your options.The vast majority of buyers opt for a 30-year, fixed rate mortgage because these loans offer the safety and security of a steady interest rate and lower monthly payment than a 15-year loan. But if you do qualify for a 15-year loan, you’ll accumulate equity faster, pay off your loan in half the time and save tens of thousands of dollars in interest savings.

Some buyers still prefer obtaining the lowest rates available, especially when buying a higher priced home and that often means choosing an Adjustable Rate Mortgage or ARM, where the rates and payments are typically fixed for 5 or 7 years. A local lender can give you the pros and cons of each, and let you know which ones you can qualify to obtain. Whatever you choose, remember that a home loan will often provide you with the biggest tax break you’ll ever get.

Get your paperwork together upfront. Every lender today must cross every “t” and dot every “i” and that means no more cutting corners and they must document everything. You’ll be given a list of items to pull together, including the last two months of all bank and brokerage statements for all of your accounts, a copy of your social security card and photo ID, full and complete tax returns for the last two years, paycheck stubs for the last 30 days and more.

The key is this: whatever your lender asks you for, you need to find a way to provide it as quickly as possible, so if you get your information collected upfront, you’ll have a smoother, faster and successful loan approval for your home purchase.

Contact me for the name of some great local lenders to help you buy a home on Bainbridge Island, I’m here to or 206-399-3641.

Copyright 2016