Chapter #5 – Is it Hard to Get a Mortgage and How to do it?
I think I’ve made it pretty clear how clueless we were embarking on our home-buying. Even though we’d fully committed to the idea of buying some Brooklyn real estate, we’d made our list of requirements and starting checking out Brooklyn apartments for sale, both my husband and I realized we didn’t even know how to get a mortgage.
For once, I’m not going to bore you with all the gory details, as this stuff certainly isn’t sexy – but it’s 100% necessary and it’s important you get it right. We made plenty of mistakes along the way, that led to delays and extra cost, before we finally settled on getting a Brooklyn real estate agency to help us. This may or may not be the right choice for you, but without a bit of helpful advice, how can you know?
So, in case you’re stepping onto the property ladder and you’re feeling a bit lost, here are my top three tips on how to get a mortgage that’s right for you.
- Choose who will help you to find your mortgage.
You’ve decided to buy a home, you’ve worked out how much you can afford for a down payment, and now you need to figure out the lending side of things. It might sound like a scary step, but there may be more options available to you when getting a mortgage than you may think. You can go to your bank, or approach a mortgage company, directly (use recommendations from trusted friends and associates). You can also opt for a broker who will search possible loan options that would suit you and your requirements. And you can always try a few different people and agencies for comparison. We preferred the personal touch of a Brooklyn real estate agency with expert brokers on hand to answer our questions.
- Get Pre-Approved
Two terms you’ll hear regularly when figuring out how to get a mortgage are pre-approval and pre-qualification. In general, pre-qualification is an initial assessment (online, in person, or over the phone) of your lending potential based on your assets and income. It’s not a definite offer and although it gives sellers an idea of your chances of gaining the funds you need, a pre-approval has stronger impetus. A pre-approval entails a more thorough assessment including credit checks so it’s more precise – there’s usually a fee involved, but we found it was worth paying. Because property is such a competitive market, pre-approval gives you and the seller more confidence in your lending. So when you’re searching for Brooklyn real estate, it puts you ahead of other potential buyers who haven’t been pre-approved.
- Check Your Credit – it Counts!
Although possible, getting a mortgage with ‘bad credit’ (a FICO score of 650-) can cause you issues. You might get some offers of a loan, but the interest rates will be much higher because you’re a higher risk client. You don’t want to fall behind on payment because of extortionate interest, so improving your credit before getting a mortgage might be the better option here. It will slow things down but suit you – and your bank account – better in the long run.
Once you’ve got your finances in order, the exciting part happens and a whole world of possibility opens up – your dreams can now become reality. You can start viewing condos for sale in Brooklyn in person, or even start thinking about the design of pre-construction properties that are within your budget. Just think, you’re a giant leap closer to finding your new and perfect home…
Do you have any extra tips to share for new buyers? Let’s get a list going in the comments below!