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Today, Dave Beckman of Guaranteed Rate joins us to discuss the latest from the mortgage lending side of real estate, especially as it relates to first-time home buyers.
One of the most crucial things you can do as a buyer is get pre-approved before beginning the home search process. This will allow you to set yourself apart from anyone else who might be putting in an offer on a home. A letter of pre-approval is the holy grail that shows the seller that you’ve talked to a lender, submitted all of your documents, and that you’re a willing and able buyer.
Having a pre-approval letter will set you ahead of the competition. It shows that you have spoken with a lender and that they have qualified you. A pre-approval is a letter that says that a lender has analyzed your income, assets, and job history, among other things, whereas a pre-qualification simply says you might be eligible to get a loan down the road. If you have a pre-approval and your competition only has a pre-qualification, you stand the greatest chance of getting your offer accepted.
There are many ways to mitigate the costs of purchasing a home if you know what you’re doing.
There are some misconceptions out there among buyers that they need to put 20% down before they can purchase a home. Luckily, that is not the case; there are many options available to people who can’t afford to save 20% of the mortgage to put down. There are also misconceptions about mortgage insurance, but there are ways to mitigate those costs as well. Mortgage insurance is not as expensive as it’s made out to be, and if you can’t afford to put 20% down, it is a very affordable way to get into a home.
There are special government programs out there with the purpose of helping the consumer to buy a home with a smaller down payment. The VA loan, for instance, which is available for past and active members of the US military, allows people to get into a home with 0% down. The scrutiny on these loans are a bit greater, but if you work with a mortgage banker, as opposed to a bank directly, you will be in the right hands.
Another issue many first-time buyers deal with is the cost of closing. A lender can give a credit, in addition to the mortgage, that can help offset the closing costs. This is a great way to keep more money in your pockets as a borrower.
If you have any questions about how Dave can help you, don’t hesitate to reach out to him at (203) 641-8287 or DBeckman@GuaranteedRate.com. Or, if you want to apply for a mortgage now, visit www.GuaranteedRate.com/DaveBeckman and fill out the application.
Of course, if you have questions about this or any other real estate topic, or if you have suggestions for a future video, please don’t hesitate to reach out to us here at Carbutti & Co. Realtors. We always love to hear from you!