When your ready to enter the real estate market and make a purchase, having a pre-approval or pre-qualification is very important. Most sellers won’t even consider an offer without one. The first step to getting a pre-approval or pre-qualification is to consult a direct lender who services the New Hampshire marketplace. Your loan originator should be experienced and work with a reputable, well-known company. If your not sure who to call, we would be happy to share several bankers and mortgage brokers that other clients have had a great experiences with. You may want to speak with a few to see who you feel you have the best rapport with.
Once you choose your lender, they will be able to provide a pre-approval or pre-qualification letter. A pre-qualification letter from your lenders standpoint would be “If what you told me is true—and I haven’t checked—you’ll qualify for this sales price” while a pre-approval is “We’ve checked your credit and investigated what you’ve told us and you’ll qualify for this sales price”. Both are accepted but, the pre-approval will carry much more weight in a competitive situation.
Obtaining a mortgage requires that you are diligent and honest with our loan originator. Your lender isn’t being difficult, they are operating under a very rigorous set of guidelines so they can give you solid estimates you can rely on when making an offer.
Your lender should be exploring different types of loan options with you based on your situation, including conventional, FHA (Federal House Administration), VA (Veterans Administration), RD (Rural Development, and NHHFA (New Hampshire Housing Finance Authority). Every loan has its own set of guidelines—both you and the property will need to qualify. Always be prepared to tell your REALTOR what program you want to use.
Your loan officer will help you estimate how much money you will need for your down payment, closing costs, escrow and pre-paids. Depending on the loan program, a seller or perhaps a family member may be able to contribute funds for your purchase.
Lenders will consider homeowner’s insurance and property taxes (also condominium fees) in the qualification process. Be sure you know the amounts used so you can compare individual listings to these numbers. New Hampshire property taxes and condo fees can vary substantially from location to location.
Your lender will stay in direct contact with the IRS regarding your income tax filings—you must be up to date—any money you owe may be added to your debt.
Lastly, you will want to wait on any large purchases like vehicles or furniture until you have closed on your new home. Large purchases during the mortgage process can throw off your borrowing ratios and complicate your loan process.
In the end, with planning and organization the mortgage process will be fairly simple and smooth. When we meet, we will be happy to answer any other questions you may have.