What is the 1st step in buying a home? This video is essential for anyone looking to purchase a home whether it be a first time home buyer or someone who has experience in the process.
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The first step in the home buying process is getting pre-approved. Whether you are buying your first home or an investor who owns multiple homes, the process should begin by speaking to a mortgage professional and going through the pre-approval process.
What is a pre-approval?
A pre approval is issued by a mortgage professional once verifying income, assets and credit. The lender will need analyze your tax returns along with your debt (from your credit report) to figure out your debt to income ratio. They will then look at how much you are putting down to determine who much home you can purchase looking at all of these factors. The pre-approval letter is a document issued by your mortgage professional to show how much home you can purchase based on the documentation you provided.
What is a Debt to Income Ratio?
Debt to income ratio is exactly as it sounds. It’s your gross monthly income divided by your total monthly debt. It compares how much you owe each month to how much you earn.
Can I start the home buying process without getting pre-approved?
Yes but it’s not the best move in my opinion. Starting the home buying process before going through the pre-qualification of a mortgage is setting yourself up for “disaster” . In my experience, this could be setting you up with unrealistic expectations. I have seen it several times where buyers are looking in a price point much higher than the amount in which they could qualify leaving them unsettled when they realize that they can’t afford what they have set their minds on with regards to size, location, upgrades, etc…..
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Other videos you might find helpful:
Is the Real Estate Market Crashing? – https://youtu.be/le_F5MYCwZ0
Appraisal vs Home Inspection – What’s the Difference? – https://youtu.be/cwjokWbr1Go
What is a Pre Foreclosure? – https://youtu.be/ChNGzpu8fdQ
Do I get my deposit back if I cancel escrow? –https://youtu.be/0RMy9iNTu54
First Time Home Buyer MISTAKES | #1 Mistake First-Time Home Buyers Make | First Time Home Buyer Tips – https://youtu.be/wtXMl5hUTZM