0
Start with the mortgage. The second biggest mistake (of the Top 10) people make is they wait until the last minute to apply for a mortgage. The problem with this is that there is not enough time to ensure you get the best program for you and your family. In addition, 79% of all credit reports contain some type of error. Benjamin Franklin once said “credit is money”. Although he was referring to actually having credit with a store to purchase goods, his quote still rings true today.
By working with a mortgage planner six months before you begin to look at homes you can be proactive about any derogatory statements that crop up allowing you ample time to fix them which in turn will increase your credit score high availing you to better programs. Your realtor will also appreciate this since now they will know you are qualified to be looking in the price range you requested. This will also ensure you do not buy beyond your means as most do. Make sure you buy based upon logic and not emotion and you will be okay.
I would recommend getting approved for your loan first since you will know your buying capacity and be in a stronger position to negotiate a better deal on the purchase. A true approval subject to a property, clear title and an appraisal would in essence make you a cash buyer. A lot of lenders do credit approval and are really only a loan officers assesment. I would recommend that you get a full credit approval either from an automated underwriting system or if a government loan from the underwriter this way you know for sure what you qualify for.
I would also recommend that you use a slightly higher interest rate of say .250% so that if the rates change for the worst from the time of your approval you still have some wiggle room to work with. Lastly I would recommend that you start lower then you qualify for to see what you can find in the market place since the homes in the market are less then they were 2 or 3 years ago you might just find your dream home for less then you might expect.
What should I do first – get approved for a loan or find a house?