Today, I brought in Kim Davis, our lead buyer specialist, to answer some questions about loans and the buying process.
The questions we hear quite often are about how to start the buying process. “How much money down is needed? What do I do if my credit is bad—how does one repair it?” And so on.
The first question to address is about the difference between a pre-qualification and a pre-approval.
The difference between the two is that when you’re just getting pre-qualified, it’s often the first step in searching for a home. Initially, you don’t even need to have your credit ran; the lender will just give you an idea of where you’re at after just a few minutes on the phone. You’ll supply them with some financial information such as your income, assets, and debts, and then the lender will provide you the preliminary estimate of the amount you qualify for.
The pre-approval is the next step, in which an underwriter will evaluate your situation and credit. They will make the final decision based on the preliminary information you provide.
“You’d be surprised at the loan programs that are available which don’t require a down payment.”
People also frequently ask about when is the best time to begin the process.
If you’re thinking about making a move, you should start the process right away. It’s best to evaluate your situation months before the move, if possible. Of course, that really depends on your situation, so the best bet is to reach out to us and let us help you make a set of plans for yourself. There are so many working parts that it’s best if you let us help you meet those goals. There’s no reason to try to navigate this by yourself. We can put you in contact with a lender that we know and trust.
What should someone do if they don’t have any money for a down payment?
You’d be surprised at the loan programs that are available which don’t require a down payment. If you or the property you’re purchasing meets certain credit, employment history, location, and other determining factors, a zero down payment loan may be an option for you. We can help you work your way through that process as well.
If your credit isn’t where it should be, what can be done?
We have a lot of programs to help you get your credit back on track. If you don’t know where your credit is, we can definitely help you find out. There are some programs wherein people with really low credit scores and a good income can get loans on houses. It’s really shocking for people. The thing is, you just need to reach out to us so that we can try to help you through that.
What types of loan options are out there?
There are a few different loan options to choose from. There’s the VA loan, conventional loan, and FHA loan for starters. Which type is best for you depends on your situation. The best bet for someone who isn’t sure about their situation is to contact us so that we can help you evaluate and decide which program best fits your needs.
Just remember that we’re here to help. Kim is in the market dealing with these issues every day, so she’s an expert on loans and the processes through which you need to go to get them.
If you have any questions, please feel free to give us a call any time. No question is too minor; we’re here for you anytime you need us.