Buying a home is typically not a purchase decision that people make in haste. There is a great deal of time that goes into the decision-making process. Did you know that you should take just as much time thinking about real estate loan solutions? To find the property of your dreams and a loan just as satisfying, learn just why it is important to start early.
Mortgage Criteria Varies
Obtaining a real estate loan is unique, and at times, a complex experience. Unlike a credit card application or vehicle loan, mortgage lenders have more in-depth qualifying criteria. For example, to finance a property, you will be held to a lower debt-to-income ratio and be required to have a certain amount of time at your current job.
In community property states, if a married person wants to purchase a home in their name only, their spouse's debts will also be included in the applicant's debt-to-income ratio. To navigate all these issues successfully, you need to start preparing early.
Interest Rates Change Routinely
If you do not follow the market regularly, you may be unaware that interest rates vary. For individuals thinking about purchasing property soon, it is important to follow the trend so that you can stay abreast of market trends.
For instance, if you are planning to purchase in 6 months, but the market looks like interest rates will be considerably higher by that period, you might discover that you can save thousands of dollars throughout the life of the loan by purchasing a few months early at a lower rate. Partner with a loan professional for help assessing the trends.
Competitive Buyer's Edge
The real estate market is competitive, particularly when there is a seller advantage. In this type of market, you must present yourself as a qualified buyer. While you can submit an offer on a property without preapproval, potential buyers who have a loan pre-approval often have an edge and may have a better chance at their offer being accepted.
The time it takes to complete the loan approval process can vary depending on your credit history, work history, and other factors. Since preapprovals can sometimes last for 30 days or more, it is best to start early so that you are ready whenever you find a property.
The most important thing to remember about real estate financing is that you are more likely to get a better deal when you prepare early. From the moment you decide you want to buy, start planning.