Home Purchasing, Financing Mortgage & Taxes Information
When buying a home there is 2 common methods. Cash and Financing (Mortgage).
Cash – The easiest method. With cash you know exactly how much you can spend before closing costs. Cash also makes for the fastest closing due to eliminating mortgage processing times.
It’s a common misconception that banks will lend any amount of money because of good credit. This is not true.
Financing – Going the mortgage route is much more complex. You have to find a lender that you want to work with. Shop around for a good rate and a lender who responds in a reasonable amount of time. A bad sign is when emails go unresponded to for days. Different lenders and banks will have various rates. Large banks have developed reputations for being late to close. It’s good to shop around.
Pre Qualification – This is NOT recommended. The pre qualification does not look at all aspects of qualifying for a loan. Typically they ask a few basic questions on the phone and send a estimate. Sadly this is wrong very often.
Pre Approved – This is what you want AND need. Both private home sellers and home builders will ask for it. Some sellers will not show their home to anyone not approved. It should always be done prior to looking at homes. It will show you exactly how much the bank will lend, saving you a lot of time. From there you can target a truly qualified price range and not worry about being turned down by the lender when in contract to buy. With approval the lender will look at some things like credit score, multi year tax returns, bank statements, debt ratio, living expenses, car payments, credit card debit, liens, investments, and more. Contact a mortgage professional of your choice for the latest information.
Taxes – A licenced Accountant should always be consulted for the latest tax laws. If purchasing for a investment property the account can go through everything you need to know before you buy.