Financing: 
The True First Step Toward Homebuying
 
Do you Need An Approval to see houses with me?
No, you don't. I will ask enough questions to see where you are in the process and will trust what you tell me. MANY other agents will require you to have your financing squared away in order to even step foot in a home with them. I have discovered that a lot of people want to see a house in person and then discuss how the whole process works before making a credit inquiry with a mortgage company. Mortgae loan officers court real estate agents to refer them business for this very reason. You can see houses with me without an approval, but you can't put in offers without some documenation that proves you are able to buy the property. While looking at homes online and scheduling your first showing SEEM like the first steps of this process, the true first REAL step is knowing exactly what you can afford and if you qualify for what you are seeking to purhcase. 

How much can you afford?
How much you can afford is really up to you and you alone. Most of the time the house payment goes up from buying from renting. If you would like to figure out how much your income could afford you can use the following mortgage affordability calculator. Be sure to click the text that says 'advanced' and enter the taxes for the area and an estimate on home owners insurance to get a more realistic idea.
 
How do you get approved?
It is easier than ever to begin the mortage loan process. Unlike this cringey old stock image that makes it seem like you will need a calculator and a pen to complete a mortgage application, you really just need a computer or mobile device. The beginning process is pretty simple for getting an approval. The credit impact of having a mortgage lender run your credit is minimal. The approval will last 60-90 days and you will have to resubmit after that to get your approval updated. Credit checks like this have minimal credit score impact.
 
Who do I recommend for getting a mortgage?
I have some trusted mortage partners which I will list below, however, you are welcome to go first to your bank and submit an application with them. If you bank tells you that they cannot approve you it doesn't mean you can't be approved by anyone neccessarily. If this happens, reach out to one of my preferred lenders below. Kick backs from mortgage lenders to agents for referring them business are not legal. It is highly recommended that once you go in contract on a home that you shop lenders in the first few days to see who has the most favorable terms for your mortage. This includes closing costs as well as mortgage interest rates.
 
My preferred lenders
Edge HomeFinance Ian Eichelberger e: ian@theiketeam.com P: 614-493-7116 (Apply with Ian)
Union Home Mortgage Michele Rodriquez e: michelerodriguez@uhm.com p: 512-704-2180 (Apply with Michele)
 
Both of my preferred lenders will council you before running your credit application to help you gain a better understanding of the process. If you have someone that is suggested to you by a friend or family member feel free to do this as well. If you feel you are already ready to apply, click the Apply links above) Your approval is good for 60-90 days and then simply has to be renewed with a new credit pull. Credit pulls have very little affect on your credit score unless you have applied for multiple types of credit at the same time. Once you have your MORTGAGE APPROVAL LETTER, you will want to give it to me or the agent you have decided to work with to have on file.
 
How do I qualify?
Are you not sure if you are financially ready to buy a home? Here are the four pillars considered by mortage lender to determine your loan eligibility and amount.
 
Good Credit
Lenders use credit scores to determine the risk of lending money to a borrower. A higher credit score suggests that the borrower is less likely to default on the loan and is more likely to make timely payments. Most lenders prefer a credit score of at least 620, but some may require a higher score. Lenders use not your highest, but the middle of the three credit scores to determine your rate and overall mortgage eligibility. Say your Equifax score is 740, your Experian is a 680 and your Transunion score is a 710. They will use the 710 as your credit score for the loan.  If you are buying the home with a partner, they will do the same for each of you then take the credit score that is lower between the two of you. Yeah, it's fucking bullshit. Most of the way the world of finance is, I'm afraid.

Reported Income: Homebuyers must have a stable and sufficient income to cover the monthly mortgage payments. Lenders generally require proof of income in the form of pay stubs, tax returns, and other financial documents. If you are a contractor it can be even more challenging to qualify because they will take the last two-three years of your tax returns and use the amount you made AFTER deductions averaged together to determine your monthly income used to determine home much you qualify for. Again, total bullshit, but the way it is... 

Money Saved: A lender wants to see that you have some money saved even if you are receiving down payment assistance. It is HIGHLY recommended if you are getting a gift from a family member or other party to get this gift in your account BEFORE you apply for the mortgage.  

Debt-to-income ratio: Lenders consider the homebuyer's debt-to-income ratio, which is the total monthly DEBT (Not bills but actual debt like credit card payments, loan payments, car payments, studen loan payments) divided by the gross monthly income (Net if you are a contract worker). A lower debt-to-income ratio indicates that the homebuyer has a higher ability to pay the mortgage. Debt to income ratio can be confusing. Check out more here>>

If you have a 580 credit score, no money saved up and lots of debt, it doesn't mean you can't buy, it just means it might be tougher to be approved. To get the optimal rates and best deal, have a credit score over 720, debt to income ratio below 36% and $10k or more in your bank account.