The biggest part of the home buying process is figuring out the home financing basics. Budgeting for buying a new home is always a challenge, but we break it down for you into easy steps.
Follow these key steps to secure your home financing with confidence
The first step in preparing your finances is to know your budget. Understanding how much you can afford to spend on a home is a big step. Once you've detailed your budget, you'll want to obtain a copy of your credit report and score. Check that all accounts are in good standing and nothing is bringing your score down.
It's highly recommended to have a pre-approval or pre-qualification letter from your lender. Clients can opt to work with a digital or human lender. Human lenders are great for clients looking for a personal experience. This type of lender can be popular for those who have complex applications or lower credit scores. Digital lenders are gaining popularity for those who like to apply on their own time and remove any personal influence from their application process.
Important: The difference between a pre-approval vs. a pre-qualification letter is that a pre-approval is based on information provided to a lender in good faith. Pre-approval letters generally don't include any verification of finances or income. With a pre-qualification letter, your lender has verified the information you've provided and run a thorough credit check.
The larger the payment you put towards your home initially, the less you'll be paying per month on your mortgage. It's also important not to dump your entire savings into a down payment. The FHA formula says you should prepare to spend up to 31% of your income on a monthly mortgage, and have a debt to income ratio of no higher than 43%. Additional expenses to be prepared for are closing costs, legal fees and expenses, home improvement, and moving costs.
Initial step with possible credit check and verbal discussion with lender
Includes credit pull, documentation submission, and loan officer review
Additional underwriting team review for enhanced confidence
Final stage once under contract with completed title and appraisal review
Connect with your Four Corner Properties agent to define your goals and timeline
Secure your verified approval to establish financing and budget parameters
Begin home search with live and virtual tours to refine your preferences
Make an offer on your selected property and negotiate contract terms
Finalize loan selection and lock your interest rate after going under contract
Complete underwriting process with coordination between lender, attorney, and insurance provider
Receive clear to close status and proceed to final signing
Our team of experts is here to guide you through every step of your home financing journey.
