Mortgage Loans- and Questions From a 12 Year Old.


On my way to my daughter's Open House tonight, I received a call from my lender letting me know that my client had been prequalified for a loan.  Naturally, I celebrated.  Right there in the front seat of my car.  There was a little dancing (not very good dancing), a little bit of singing (not very well either), and a couple of fist pumps (I totally rocked those).  My daughter, who may or may not have been a little embarrassed, started asking questions.


She wanted to know why I was so excited.  Of course I explained that prospecting clients was a process.  A never ending process in this business.  That as a Realtor I work hard to get out in the world and find people who need my services.  That finding someone who needed me, and then finding out that they had their credit and finances in a position to purchase, was something definitely worth celebrating.

Then came the big questions.

"How do you get your credit and finances in order to buy a home?"

That's a tough question to answer to a 12 year old, but I think I handled it like a pro.  I told her you can't owe too much money compared to the money that you make.  You have to make sure you have paid all of your bills on time, have a steady job, and save up some money for a down payment.  Simple right?  Right.

The truth is that the whole process starts with those four things.

1.Credit score
2.Debt to income
3.Income
4.Down payment

Now, with every person and every situation there are different options.  With the right loan professional, you can find the loan to fit your needs.  There are several different types of loans, and they all have different requirements.

For some your credit score can be as low as a 580, others will require a 680. Same with Debt to income.  This number varies from loan to loan as well.

There are maximum income levels on some loans, and loan levels will depend on your income (make sure you can prove what you make).  Some loans require minimum down payments of 3.5%, 5%, or as high as 20%, while others require none. That's right, ZERO. Some allow for gift funds, some require that money to be yours for a certain amount of time.

There are VA loans, USDA, FHA, renovation mortgages, jumbo loans, investor loans, construction loans, conventional loans, the list goes on.

But they all start the same way.  Good credit, don't owe too much money, have a steady job, and save for a down payment.  Or, save for your new refrigerator, that dining table that you loved, or for your favorite pair of shoes.  Just have some money on hand at closing because its a good thing to have.  Plus you'll need it for other things, like appraisals or inspections.

These are all things a good Realtor will go over with you, and things a loan officer will help you with. You only need to make the first call.  Or ask questions about an awkward celebration in a car.  I'll leave it up to you.



-Jean K

RE/MAX Patriot
Realtor #0650939
210-241-0268
jeankrealestate@gmail.com
www.jeankrealestate.com





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