Buying your new home new can be quite an endeavor. With over 50 years’ industry experience and a tradition of delivering excellence to each and every one of our clients, you will receive the essential guidance you need to help you decide which home is right for you.
Whether you are a first time buyer, a move-up buyer or a seasoned investor, consider the following key pieces of advice, which will help make your home buying experience go more smoothly.
Before You Start To House Shop, Get Pre-qualified or Pre-approved for your mortgage
Sellers today are more sophisticated than ever before, which means they may not blindly accept your contract without you demonstrating that you are a bona fide buyer. And your real estate agent may not set up showings unless you are prepared (upfront) to demonstrate your wherewithal.
So, once you are ready to get out there and locate your new home in earnest, meet with your banker or mortgage banker and get a pre-qualified or pre-approved so that we can move quickly once you find the home of your dreams.
If you don’t have a mortgage professional yet, we can help with a referral to some of the industry’s top professionals.
In order to obtain a Pre-Qualification, or Pre-Qual, your banker or mortgage banker will perform a very rudimentary analysis of your income & expenses based upon information that you provide. It does not include a full analysis of your personal credit, so the information may be incomplete and therefore less reliable than a Pre-Approval. A seller will not rely upon your Pre-Qual because it does not account for your personal credit score/rating and is therefore of little value in providing the seller a level of confidence in your ability to close.
Your banker or mortgage banker will take the information that you provide for your Pre-Qual and also run a three-bureau credit report, which will afford him/her the ability to A) see your credit scores and B) properly analyze your DTI, (Debt To Income ratio) which will then allow him/her to establish your maximum purchasing power. A seller can confidently rely upon your Pre-Approval because there are essentially just two variables that could cause a negative outcome (ie: no closing) are 1) a problem with the value of the property or 2) you run up additional consumer debt during the contract period, which causes your credit score to drop resulting in your inability to qualify for financing.
Proof Of Funds (POF)
POF is essentially used when making a cash purchase and is ostensibly an account statement from your bank or other institution with custody of your funds, which demonstrates sufficient liquidity to close the transaction. Cash is king, so if you are a cash buyer, your negotiating power increases because you are able to close much faster than a buyer who will present an offer with a financing contingency. Sellers typically gravitate towards cash offers with short closing timelines.