October 13th, 2024 1:00 PM by Sam Kader MLO130505
Check your own credit. You can pull your own credit for free here and for a nominal fee - you can request for a credit score as well. Review the information and make sure that it looks accurate. Credit scores play a significant role in determining what mortgage rates a homebuyer can access - the higher the scores, the lower the mortgage rates.
Pay down your debt. By working to boost scores early in the homebuying process, homebuyers can put themselves in the best position to secure strong rates when they finally drop.
Start saving. You can buy with as little as 3% in down payment. However, 20% down payment is recommended to avoid paying for monthly Private Mortgage Insurance (PMI). If your projected monthly mortgage payments are higher than what you currently pay in rent, set the difference aside in a dedicated account to stimulate the economic conditions of being a homeowner. When you are ready to buy, you have additional savings socked away from hypothetical mortgage payments to put toward a real home.
Even when you think you are not ready to buy a house - I strongly recommend that you obtain a Pre-Pre-Approval which involves potential buyers applying for a mortgage with the intent of not purchasing immediately but as a fact-finding mission to understand the process and to figure-out where they are at their home-buying journey. By treating the application process as a tool for gathering information, we can identify what puzzle pieces are missing and we can create a roadmap to get you into a home.
This approval not only alleviates the stress of engaging with a mortgage broker but also shifts the focus from immediate purchasing to strategic planning. By making the initial steps of contacting a mortgage broker, first-time buyers can better understand what they can afford and what adjustments might be necessary to achieve their goals.
Your realtor will require a Pre-Approval letter before showing you houses. Pre-Approval is a document provided by your lender outlining how much money they might loan you as a prospective buyer. At Pacific Coast Financial - we will only issue our Pre-Approval letter once we've scrutinized your credit worthiness, including by vetting income, employment history, credit and assets as required per RCW 19.146.0201 (1) (2) and (7).
When should I buy? If you can make it now and you know it's only going to get better, then why wait? Figure out what your current market rates here and determine how much you are comfortable with in mortgage payment here. If you're financially responsible and you stick to your budget, then you'll reap the reward of homeownership.