Congratulations! You have submitted all the required documentation and now you have that Pre-Approval for your new home.
So… what’s next?
As you continue to move along in the home buying process, you will only be charged for the services you used, such as a title search or home appraisal if down the road you decide you do not want to continue buying the home.
Please, please— Do not buy furniture, a car, or open any new lines of credit during the mortgage process, because it will increase your debts, impact your credit, and could disqualify you from receiving your home loan.
Also, do not change jobs during the process. An employment change will affect the job t history portion of your pre-approval application, which directly ties into your ability to repay your home loan.
Unfortunately, I’ve had this happen to clients and it only complicates things and extends the buying process much longer than it has to be.
It is great that you are pre-approved for a home loan and now know your mortgage budget, but there are three essential things you must know before the home search begins.
First before you contact me to see your 1st property, find out what your monthly mortgage payment will be so that you will not overextend on your mortgage payment. Many times I have had a pre-approved buyers look at homes, want to put in an offer on a home, and then find out they have to discuss the monthly payment with their mortgage advisor before moving forward.
This can bring the entire process to a halt and while clients are going back and forth with their mortgage advisor. Someone could come in with an offer and buy a home they love right out from under them. Ugh, that would be sad!
Second, you want to know your allowable taxes for the year. This will help you save time by bypassing the homes that are not within your allowable tax budget. Please note that allowable yearly taxes are not always set in stone. For example, if you are allowed $8,000 per year in taxes and the home you are interested in has taxes of $8,400 per year, your mortgage advisor can likely adjust the figures on your pre-approval to qualify you for the home.
Third, you want to know exactly what funds you are earmarking for your down payment, closing costs, and out of pocket costs associated with home buying. To keep things moving in a positive and forward direction, staying on top of fund allocation prior to looking at homes is key.