Buying a Home


Mortgage rates are at 50-year lows. Home prices are affordable again for thousands of families. Since nobody knows how long this will last, today’s market is a rare buying opportunity for working families with stable incomes and good credit.

But too many qualified borrowers are sitting on the sidelines because of misinformation about the new rules of the road for getting a mortgage.

New Rules of the Road

A qualified borrower should have:

  • A stable income
  • A good credit history
  • A common-sense downpayment; generally, about five percent of the purchase price for a conventional, conforming mortgage. (Fortunately, there are downpayment assistance programs for qualified borrowers.)
  • Documentation – responsible lenders today will want documentation verifying your income (like W-2 forms, tax returns), employment, credit history, and assets – such as bank statements – to verify savings.

Under the new rules of the road, the lender must also obtain an impartial third-party appraisal that complies with new rules to verify that the value of the house you want will support the mortgage you need to finance it.

Getting Pre-Approved

Anyone still unsure about the new rules should ask a reputable lender to pre-qualify them for a mortgage. Think of a pre-qualification letter almost like a driver’s permit for the new rules of the homebuying road. A mortgage pre-qualification letter can:

  • Confirm you can qualify for a mortgage;
  • Tell you how much you can expect to borrow;
  • Make you a stronger home shopper since sellers won’t have to worry about whether you can qualify for a mortgage.

During the pre-qualification process the lender will review your credit, financial, and employment information. There may be an application fee. Athough mortgage pre-qualifications are usually only good for a limited time they are still worth getting. The reason: even though you will need to apply for a mortgage once you find a house to buy, your pre-qualification letter helps clear the way by telling home sellers you’re road-tested for the most affordable mortgage market in 50 years.

SOURCE: Freddie Mac


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NMLS #177019


Work: 240-292-1440

CBrad Cohen is a registered Mortgage Officer NMLS#177019. All material is © 2012 Brad Cohen.

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The 21 (Yes, 21) Commandments of Buying a Home

Following these, can help to make your home buying process a smooth one. So if you’re planning on house shopping this weekend, take the time to read these: Thou shall not view even one home without being pre-qualified for a mortgage.(CALL ME) Thou shall not buy the first home that you view. Thou shall not …

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