Finding Your Financial Footing in Real Estate

I often find speaking with people considering buying property for the first time that they don't know where to start. Buying a home is a big decision, so I can understand the pause and lack of direction that can come, especially when you have a career and other focuses in life!

In many cases, and for first-time home buyers, you'll be looking to purchase with a mortgage contingency. The word "contingency" scares me a little bit personally... I'm buying this place, but it's contingent on me obtaining a mortgage -- it feels like it's a wait-and-see scenario, but it shouldn't be!

Below are a few tips to keep in mind as you navigate the buying process coupled with a mortgage:

Seek Out A Bank

There is no reason to delay, and every bank is ready and willing to run the numbers to see where you stand. Your current bank likely has a mortgage lending business worth exploring at the very least. You can also shop around to compare quotes or choose to work with a mortgage broker that can take on the search for you.

Demystify The Process

Education is your best friend. The more information you can see and start to digest concerning interest rates and products offered, the better you'll be throughout the transaction. There are lots of products to consider, like adjustable rates vs. fixed mortgages. The most popular product is a 30 year fixed, considering the interest rate is fixed and won't change, and the monthly payment will be the lowest.

Pre-Qualification vs. Pre-Approval (go the extra yard)

In taking steps to obtain financing from a lending institution, they will ask if you'd like a pre-qualification or pre-approval for a loan. I would suggest the latter since a pre-approval is a firmer commitment considering the bank has run credit checks and looked over your financial background, making you better positioned come offer time. The seller and agent will know you're legitimate, have done your homework, and in all likelihood will successfully close on the home in the permitted time frame (usually 30 days).

The above are just a few areas to keep in mind when thinking about real estate financing. It's best to do your personal finance due diligence ahead of time so you can be an informed shopper and can pounce when ready to make an offer! You'll also be that much further along in the process to receive the ultimate assurance of a loan, the commitment letter.