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Most home buyers need some form of financing. Rare is the person who has the entire cash amount. Home prices vary, which means one neighborhood can have a range of pricing for similar homes. This can make it more difficult to get proper financing. However, it is not impossible to get funding, although the process may seem daunting. Consulting housing experts like Armando Montelongo can help answer questions.
The first step is to get pre-approved for a home purchase with your current income. This makes it easier to buy.Once you are pre-approved, start looking at homes in the price range that fits your housing criteria. It is OK to stretch a little above the pre-approved limit, but don’t go too far. Having a large down payment also helps. Lenders like to see no more than 33 percent of income go towards housing debt, although some will go as high as 40 percent.
Once you have decided on a home, it is time to go to the bank to start the loan process. The bank will want two years of tax returns and various proofs of income. They are also going to look at your debt load, so hold off on any large purchases until after the loan is secured. After the initial round of approval, the bank sends out an appraiser to the home to determine if the house is worth the amount of the loan. Provided the appraiser comes back with a “yes,” the bank then sends the loan to underwriting, where it is then financed to the buyer.