Home for the holidays
There’s no place like home for the holidays, right?!
Unless you don’t love your current home.
And that happens more often than you might think.
If you are wanting to deck some new halls for the holidays next year… you’re in the right place, my friend.
We know - we know - you’re barely keeping up with this year, how in the world can you be thinking about next year already?!
[Do us both a favor, and bookmark this page. Email yourself this link to be delivered in January if needed. Find a way to come back to us again, because it’s worth it. Promise.
The joy of being in a new home is worth it. You are worth it.]
Okay, back to it!
5 things to do if you want to be in a new home for the next holidays:
1 - Know your stuff.
Mortgage lenders know a lot about mortgages, but we don’t (yet) know much about your goals and your situation.
When it comes to your next home (or first home, we love first-time homebuyers) what do you want?
What do you think you can afford?
What’s your ideal timeline? Next spring? Next summer? Next fall?
This helps your lender get a head start on what they’re working with and is better equipped to guide you through the mortgage journey.
2 - Talk to a lender early.
We bet you’re really surprised with this one ;). No matter what house you buy - you’re going to need funding for it.
Connect with a lender early to have a nice long runway to figure out your options, get your ducks in a row, and give yourself the best chance for optimal results.
Because your situation is unique.
We’re big believers that no two mortgages are the same.
Even if you’re buying your second home, your situation has changed.
It’s unique to this moment in time.
You deserve a customized approach - talk early with a lender to map it all out.
3 - Get your docs in order.
At some point in your mortgage process, you will have to provide some documents.
There are basic pieces of information needed in order to verify #1 - that you are who you say you are and #2 - your ability to repay the loan.
We like to ask for the documents fairly early on in the process. This helps us provide you with a pre-approval letter (very different from a pre-qualification letter) as well as lets us track the reality of your situation.
Say you have a 620 credit score - but we know that a 650 will make you eligible for a lower interest rate. We now have time for you to work on improving your credit score.
**That above credit score example was merely for illustrative purposes**
It’s good to know what documents to be looking for and gathering as you prepare.
Here’s what your lender is likely to ask for:
ID
Pay stubs (from the previous 2 month)
W2s and/or 1099s (from the previous 2 years)
Bank Statements (full statements - not just screenshots)
4 - Monitor your credit report.
There will come a time when your lender will pull your credit report. Love credit or hate credit - the reality is your credit score is a primary factor in determining which loan products are right for you.
Consumer monitoring sites are hit-and-miss.
We generally say some idea is better than no idea - so track your credit trends at www.CreditKarma.com.
You used to be able to get access to your full credit report once a year through www.annualcreditreport.com, however, you can now get access to your credit report each month!
(A program currently set up due to Covid, set to expire at the end of 2023.)
This is a wonderful tool to watch your credit and see how it’s changing. All the better to help you use your credit to your benefit when buying your next home!
5 - Start building your savings.
If you know you want to buy a house in the near future - it's never too early to start saving for it.
Sure, there’s the age-old question “should I pay down debt to help my debt-to-income ratio, or should I save money towards a downpayment”?
Just another reason to talk with a lender early. They’ll be able to tell you which is best for your situation.
We do know that you’ll need to come to the closing table with some amount of money in hand. (Not literally, please don’t show up to your closing with a briefcase of benjamins. Cashier’s checks travel much lighter.)
While you don’t always need a 20% down payment, you will still have some closing costs.
So start saving now - your future self will thank you for it!
Actually, your future self will thank you for doing all of the above.
The key to all of this going well - in our humble opinion - is talking with a great lender sooner rather than later.
Why do we emphasize a “great” lender? Because not all lenders are great lenders.
Unfortunate, but true.
We say a great lender is someone who cares about you and your financial confidence.
They’ll ask you questions, educate, communicate, and do everything they can to ensure your loan closes on time.
So how do you know if you’re working with a great lender? That’s a great question.
And that’s what you do. You ask questions.
Here are 10 questions to ask your mortgage lender:
How much house can I afford?
What are the qualification guidelines?
What can I expect in closing costs?
What documents will I need to provide?
What could slow down the approval of my loan?
Why do you pull a credit score?
What programs do/don't you offer?
If I don't qualify right now, what can you do for me?
Will you be available if I wait 6 months or longer to buy?
How do you make money?
No matter what, you deserve a mortgage
you understand
are comfortable with
and can afford