Making Sure You Are Ready:
Before you make the decision to move forward with the home buying process, you need to make sure that you and / or your significant other are ready financially to get financing for your home. Obviously, you will need to have the proper credit score, the proper income, and be ready for the possibility of coming up with some kind of down payment. The FHA has just loosened its down payment requirements for qualifying loans, so this has been helpful with getting home buyers approved for a loan.
With lender requirements greatly tightened, you will need to research the type of loan for which you can qualify. A great proactive next step would be getting a pre-approval letter from a lender. A pre-approval letter shows that you have gone through the loan application process and can actually qualify for a certain amount of money to buy a home. This helps you tremendously in knowing exactly how much money you can spend on your home purchase. Having this letter, in general, will also help in contract negotiations because it lets that seller know that the financing is practically in place, putting you in a better position to negotiate if the pricing is “tight.” A seller might not want to waste their time with counter-offers if there is not a guarantee that the sale will go through.