In general, the more time spent on the critical first step of research and preparing, the smoother and more successful your purchase is going to be.
It’s best to plan your Triangle Area homebuying goals a few months before you hit the market.
Pre-approval only takes an hour or so on the phone with a mortgage officer. But if you hit a problem—usually with your credit report—starting early means you have time to fix it before making an offer.
So get the ball rolling early and leave yourself some extra time—at least a few weeks—before you really want to start house hunting.
Find a Mortgage Expert
Next, talk to a mortgage broker or your local North Andover-area bank/credit union to discuss how much house you can afford.
An expert will analyze your current debt and income, estimated taxes and insurance, and come up with a home price that they think you can afford.
The number they give you is important—it determines the maximum amount you can borrow for your mortgage. That max-borrow total, plus any other money you plan to spend on this North Andover real estate purchase (like profit from another home sale) becomes your house hunting budget.
The mortgage industry is fiercely competitive and there have been some shady things done in the past. The industry cleaned itself up big time after 2008-2010, but it’s still best to avoid the giant mortgage factories.
Work with a local bank or credit union somewhere near the Triangle area. You probably won’t have to meet with them in person, but a local option is always a safe bet.
You’ll need a credit check.
Today’s mortgage standards require a credit check. That credit check actually happens now—during pre-approval, along with a few other paperwork requirements.
It makes sense: the banks want to know as early as possible whether you’re a good candidate for a mortgage. So they want to get this out of the way early.
Starting early makes sense here too: if the bank find a problem with your credit, you’ll have plenty of time to fix it before making an offer.
What to expect from your mortgage lender
Your bank or credit union should explain all of your loan options (yes, there are more than one). They should also offer suggestions or advice on a few important topics:
- How to improve your credit score—these folks review credit scores every day! They’re experts.
- How to handle your money between applying for a loan & closing—more complicated than you think!
- When to lock in your loan’s interest rate—rates change daily, so when matters!
- Which loan programs are best for you—conventional, VA, USDA, FHA, etc.
Some of the questions may feel a little private—how much money do you make? what do you spend a month?—but they’re all required. They’re only doing their job!
What your mortgage lender expects from you
Be prepared—you’ll need copies of these documents:
- Tax returns
- Bank statements
- Employer names and addresses
- Current landlord’s information (if applicable)
Be honest—the lender needs complete, accurate information in order to their job. The more cooperative you are with a lender, the easier the loan process will be.
Plus, if there’s any funny business, you’re the one who loses out. It’s in your best interest to be honest, forthcoming, and responsive.
After the mortgage officer goes over your financials, they’ll send you (usually just via email) a pre-approval letter with your magic number (how much you’re pre-approved for). This pre-approval letter is an absolute must-have for this phase.
Give the letter to your Trianlge Area real estate agent. They’ll keep it with all the other required paperwork, and then you can forget all about it. But remember the magic number!
Your offer should explain how your deposit money will be returned to you if your offer is rejected or kept as damages to protect the seller if you back out of the deal without an adequate reason to do so.