Be a smart buyer!

Be a smart buyer!

By Kip Reynolds

Purchasing a home may be the most important and enriching thing you ever do. It is easy to get caught up in the excitement of finding your dream home and miss important steps along the way. Improper planning can result in a slow process, disappointment, and even failure. Be a smart buyer! Sometimes love at first sight happens, but be sure to secure solid financing first.

According to the National Association of RealtorsⓇ Profile of Home Buyers and Sellers, over 85% of buyers will need a loan to finance their home purchase. In order to secure a loan, prospective buyers will have to provide certain information to a lender to prove loan repayment. Your lender will issue either a pre-qualification or pre-approval letter. These terms, often used interchangeably, are actually different.

Pre-qualification, in the form of a letter, grants the buyer conditional approval to purchase up to a certain price. This pre-qualification or pre-qual is generally based on income, debt, and savings. It is not the final say, but it will provide a good price guideline for your search and often is submitted with an offer to purchase.

Pre-approval or Desktop Underwriting (DU) is accomplished by providing additional information including employment, financial, credit score and credit history to a lender. Similar to a pre-qual, a DU is also a statement of confidence that the lender approves of your purchase through Fannie Mae or FHA guidelines.

 It is important to note that pre-qualification and pre-approval are not guarantees of closing. They are important first steps that offer a seller and your RealtorⓇ a snapshot of your current financial abilities. Be sure the lender you choose helps you to know and understand all fees and monthly costs associated with any purchase price. It is infinitely more effective to house hunt successfully when you have a concrete price range and know the real costs you will face.

So the big day has arrived and with letter in hand you are armed for success; ready to start looking for your dream home. Now it is time to meet with your RealtorⓇ. A good agent can use current technology to focus your search, optimize your time, and realize your goals. Communication is key to your success! Meet to discuss your budget, desired location, school district, and property features just to name a few that will make your dream home a reality. Lending is very important, but having a relationship with your agent who knows the market and the business is key to making your home buying dreams come true.

Kip Reynolds PA ABR CRS BPOR

RealtorⓇ serving the Fort Lauderdale area since 2005

Atlantic Properties International, Inc.