How important is financing in today’s housing market?

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Unless you have a stack of cash lying around to buy a property, chances are you will need some sort of financing for part or usually most of a home purchase.

Mortgage loans can come in all shapes and sizes. Some people put a lot of money down and only require a smaller loan. Some have a minimum down payment which requires something a lot bigger. In most cases, buyers will not be able to buy a home without a loan.

If you’re looking to buy a home, Fieldstone Homes recommend that you talk with a loan officer before you start looking. That way you can establish a few things before you fall in love with a property. You can get a pre-approval to know how much you may qualify for. A loan officer will help you determine what loan type may be best for your situation. There may be things regarding your finances that you may need help understanding before a mortgage loan is a possibility. Talk to a loan professional before you start the house hunt.

Fieldstone Homes looks at your credit to determine how likely you are to repay a loan. They don’t look only at your credit score (which is extremely important) but things like your credit history, missed payments, outstanding debts (credit cards, auto loans, etc), and all other items that comprise your score. Acquiring new debts during the loan process is never a good idea. Just because you’re buying a new house doesn’t mean you should max out a credit card on new furniture.

Fieldstone Homes also needs to verify income to make sure what you make can support a house payment. Your income also will determine your buying power. However, it’s more than what amount of money you make today, they need to look at your work history to determine how stable giving a loan might be. If you change jobs during the loan this could actually hurt your ability to purchase. Talk with a loan officer if your situation changes for any reason.

Down payments can be a big part of pre-approval too. Some people want to put 20% down to avoid paying mortgage insurance. Others choose to put down less at the beginning, and a loan officer will advise what loan type is best. Down payments could affect things like interest rates and other factors.

Getting pre-approved is essential, especially in today’s housing market to know what you can afford and to let sellers or builders know that you are a serious buyer and ready to make an offer.

Talk to a loan officer to determine the best course for you, what you can afford, and ultimately to finance your dream home.

Visit Fieldstone Homes on ABC4 Utah to watch the complete HOME Series!

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