We Tell it Like It Is

I can't express enough how important it is to actually sit down and meet with a mortgage person before you start seriously looking at homes. I've worked with MANY home buyers that were 100% certain they were able to buy a house and were looking in the right price range. After looking for months, they find a house they would like to buy and when its time to put in an offer:

1) They forgot to meet with a mortgage person and aren't pre-approved. (Sellers will not look at an offer unless a pre-approval letter comes with it) They then have to go through the pre-approval process and lose the house to another buyer that places an offer in the meantime.

2) They meet with a mortgage person and find out there were many factors that they didn't consider regarding their finances, etc. They realize they have been looking in the wrong price range and can't afford the house they want to put an offer in on (not to mention the fact that they wasted months of looking at homes they weren't even eligible for).

Mortgage people do not bite. And they don't charge you for any of their services unless you actually close on a property that they helped you finance. You are saving a lot of time and trouble by meeting with them at the beginning. They can give you what they call a "Good Faith Estimate" which will give you details of how much you can afford and how much it will cost you to purchase a home. Purchasing a home doesn't just consist of handing over $200,000 to the seller AND not everyone can get a home loan. Here are some basic questions to ask yourself:

1) Do I have money for a downpayment? The minimum you have to have right now for a downpayment is 3% of the sales price. And that comes in the form of cash out of your pocket.

2) Do I have the funds to provide for earnest money? Earnest money is due at the time you submit an offer to the seller. It is proof that you are serious about purchasing the home. Ignore non-realtors who tell you its no longer required--I'm a full time agent and I've never had a buyer get away with not submitting an earnest money check with their offer. Earnest money is 1-2% of the sales price. You do get that money back at closing but its held by the sellers agent as a safety deposit until then.

3) Ignore the listing prices of homes. Figure out and focus on what your monthly payments would be based on a 30 yr loan at 5-6% interest. Google "mortgage calculator" and plug in the numbers.