Buying Your First Home in Nashville? Step One is Finding a Lender
Many years ago I wrote a series of blog posts which applied to the first time home buyer. After sending it out to many clients over the years, I have decided to go back through the steps and update them.
This blog is STEP ONE in the series.
If you are going to buy a house in the greater Nashville area and you have CASH, please skip on to the next post!
If you do not have cash and are looking to obtain a mortgage (like most people), then continue reading!
The FIRST STEP to homeownership is…
FINDING A LENDER!!!
It would be silly to tell you not to start looking online at houses until you know exactly how much you qualify for. That is what most of you will do! And there are these cute little widgets which will try to beckon you by saying “How much will your mortgage be?” or “How much can you afford?” Good questions, right? What I have found is that most of those widgets won’t be able to tell you the complete truth – they won’t be adding in expenses like real estate taxes, homeowner’s insurance and other items which first time home buyers might know nothing about.
Determining the amount that you will be able to spend will be largely based on your credit score and how much debt you have versus the amount of income you bring in. If you have never run across the infamous credit score, then this will be a learning experience for you. You will now have a real motivation for paying bills on time and keeping your debt to income ratio low! And, if you don’t have 20% cash for a downpayment, then be prepared! You may have to pay private mortgage insurance on a monthly basis!
How do you find a good lender? I’ve done another blog post on this topic which you may want to read at this point before continuing.
Once you select a lender that you like and feel that you can work with, then go ahead and send in the required information to determine how much of a home you may qualify for. This is called the pre-qualification process.
If, for any reason, you do not qualify for a home at this time, do not feel bad! There is no way to know unless you ask! If you don’t qualify now, ask the lender for some steps you can take to be able to qualify. I have worked with some clients who have changed their situation in as little as six months time!
Also, if you do qualify for a home, but think that the price range is too low to find something you really like and feel you can afford, THINK AGAIN. Okay, you may not get your dream home in your dream location just yet, but you have to start somewhere and “moving up” takes time and a bit of strategy.
I usually recommend that you think VERY SERIOUSLY about what you can afford according to you – for example, if you think you can afford $1600/month for housing but could possibly stretch up to $2000/month, try to stay as much on the $1600/month side as possible! This will mean less stress in the long run (financially speaking)!
My preferred lender is Tonya Esquibel with Summit Funding. She has been in the business forever, provides quality information and quality service and ALWAYS closes you if she has pre-qualified you!