OK – you are thinking about buying a home this year. Great!
Step one before falling in love with properties and scouring the listings that NextHome Titletown Real Estate can provide you (for free!) is to work with a bank, credit union, or mortgage broker and get pre-approved for financing.
We know that you’re eager to start house-hunting. But before you schedule your very first showings, you need to work out how to get a loan in Boston.
From pre-approval to closing, here’s what you need to know to get a loan in Boston:
CHECK YOUR CREDIT SCORES
Before you ever approach a lender, understand how your financial situation may position you in the eyes of the ones giving out mortgages.
Check your credit score (You can get a free credit report annually from each of the three major credit reporting groups – Experian, Equifax, and TransUnion) and see where you stand today. If you have a credit score above 720, you’re in great shape to qualify for a variety of mortgages at competitive interest rates, which as of this writing are at historic lows.
Knowing your credit scores ahead of time helps you better prepare for the types of loans, amounts, and interest rates you can expect to be offered by lenders.
GATHER YOUR FINANCIAL DOCUMENTS
Regardless of whether you’re going with a traditional bank, a credit union, or another mortgage lender, you’ll need to provide a great deal of financial information when applying for your loan. Honestly, it’s a bit of a drag gathering everything. But, these are all necessary steps in the underwriting process, and banks are doing much more thorough amounts of due diligence today as compared to the free-flowing subprime mortgage crash that helped cause the economic collapse of 2008-2009.
Some key documents to make sure you have handy are:
Bank account statements
Other mortgage statements
Social Security number
All of this documentation will be provided to your lender during the pre-approval process and may need to be updated during the final mortgage approval process.
GET PRE-QUALIFIED FOR A LOAN
This is the first step in the mortgaging process. It doesn’t actually require strict proof of income, but it is a good starting point when searching for a home.
In the pre-qualification process, you will be interviewed by the lender about your income, assets, and expenses. Although pre-qualification is not an official process and doesn’t actually indicate that you will be approved for a loan when the time comes, it helps you get a better idea of how much loan you can afford when the time comes.
This information can direct you toward homes in your price range and narrow your search, leading to a faster and less frustrating process for you. A pre-qualification letter, though, does not hold much weight if you submit it with an offer to purchase, especially in a hot market where multiple offers are common, as the sellers will want to know that you have proof of funds and financing before accepting your offer.
SECURE A PRE-APPROVAL FOR A LOAN
The final step before you finally get a loan in Boston is pre-approval.
Pre-approval is not a mandatory part of the process, but it is one that can help put your mind and the sellers’ minds at ease.
In securing pre-approval, you will provide all that important documentation – proof of income, proof of assets, and identifying information – to the lender. The lender then pulls your credit report and uses all available information to make a determination on whether you qualify, how much of a loan you qualify for, and at what interest rate.
With this information in hand, you can more confidently put a solid offer down on that home you fell in love with, getting one step closer to move-in day.
Once you’ve gotten pre-approval and have an accepted offer on a home, your lender will assess the value of the property you intend to purchase.
With all this information in hand, the lender then issues official commitment to lend you a certain amount of money at a specific interest rate. This determination will come in one of four forms: Approved, Approved with Conditions, Suspended, or Denied. If you have pre-approval, the likelihood that you will receive a Suspended or Denied determination is much lower.
When you receive this approval, you are all set, and you’re well on the road to final closing day and your new home!
It can be stressful to get a loan in Boston, but with the help of our trusted, experienced agents at NextHome Titletown Real Estate, the process can be easier. Let us be your partners in finding your dream home! Contact us at (617) 657-9811 today!
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The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.
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