1: FIND OUT WHAT YOU CAN AFFO U CAN AFFORD
This first step is essential. You have to establish your price range before you do anything else in the home-search and home- buying process. Develop and know your budget. Factor in the down payment and closing costs, and how much money you will need in liquid reserves (comprised of checking, savings, retirement, stocks etc.) after the closing. When developing your monthly budget include the mortgage payments, property taxes, homeowner's insurance, utilities, basic maintenance, and homeowners’ association fees (HOA) if they apply.
STEP 2: GET PRE-APPROVED FOR A LOAN
Home buyers contact mortgage lenders because the full cost of a home is generally more than the typical buyer can afford or often want to put into the asset at one time. The process of buying a home, is a major emotional investment, you will want to maintain control and make practical decisions based on your budget and goals. The best approach? A conversation with an experienced, licensed, mortgage originator with whom you will work closely. Together you will determine the appropriate budget for your home acquisition and monthly expenses that leads to a pre- approval for you to share with a real estate agent. Many real estate agents now require a pre-approval letter, or a Mortgage Credit Approval Letter also known as a TBD commitment (Property to Be Determined), or proof of funds before taking you on as a client. This assures the agent, and later assures the seller's agent and the seller, that you have the financial capacity to complete the deal. The differences between a pre-qualification, a pre-approval and an TBD commitment are discussed in the "Origination"
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