It’s easy to get swallowed up by the terms and requirements of the mortgage world, things like escrows and rate locks, wondering why anyone would want to look at your college transcripts, being bamboozled by being told you don’t have enough debt (yes, there is such a thing) and all kinds of “little” details you would never even think of!
I’ve gotten together with some of our most experienced mortgage originators (combined, these two have over 60 years in the biz!) to get some of their top tips for purchasing your first home!
Mr. Larry Potter (no relation to the wizard), the Director of Mortgage Lending at LACU, believes that planning and preparing is the key. Start by speaking with a loan officer first to get pre-approved and go over the process to see what it will be like from start to finish. They are able to estimate what it will actually cost you to purchase a home and what your eventual payment will be like. Trust me, it adds up quick and you don’t want to be caught off guard when you find your perfect first home and realize it will be a $1,500/month payment!
Tom Wehmeyer is the Mortgage Loan Manager, and he truly is an expert at getting home loans approved! If there’s a product or situation out there, odds are he’s dealt with it! The man has more sayings (we call them Tom-isms) than you can count, but he is as wise as they come. He’s a by-the-books kind of guy and can help you decide what is best for you by presenting the options. He suggests a detailed conversation with a loan officer to discuss the details we will need to obtain and document to get you approved for a loan. People are often surprised at the documentation they need to provide, things such as tax returns, utility bills, statements from landlords of your past 12 months payment history, etc. Often times there are issues that can be easily cleared up, but there has to be knowledge that they are issues first and we can help identify what they might be!
His biggest recommendation is to determine your “threshold for pain”. Don’t let a realtor or even a lender tell you what you can afford. What you make in a month (gross income) divided by the debts reporting on your credit report (called a debt ratio) generally needs to be under 41% including the proposed payment on the new home. The problem people run into is that they don’t consider that this ratio doesn’t account for vehicle insurance, groceries, entertainment expenses, car repairs, daycare costs or any of those “unpredictables”. Your being comfortable with your payment is key, not just what the numbers say you should be able to afford. We want to help you realize your dream and still be happy with your choice two, six or sixty months down the road.
So, if you’re thinking about a new home, now or in the future, give us a call, stop in or request a consultation with one of our very qualified loan officers! Heck, you can even apply online! We’re here for you to help make that American Dream come true.