Tips to get the best home loan from a top Houston broker

Talk to a real estate professional about the home buying process and the first thing they will tell you is to speak to a lender so you can find out what you can afford and get a pre-approval letter.

However, what is not often shared is what you should do to prepare for this conversation.

If buying a home is one of your goals for 2022 — or even 2023 — it’s important to plan ahead and line up your financial ducks. Douglas Elliman agent Harris Benson says to ask yourself two important questions:

1. Why do you want to buy?
People buy for all sorts of reasons: a growing family, moving in with a partner, a new job or city, downsizing, as an investment, etc.

2. How long do you plan to own the house?
Depending on your industry or your personal situation, you may already know that you will probably be moving to a different city in a few years. Unless you plan on keeping this home as an investment, this is an important factor to consider as it should drive your overall search.

Check out Benson’s top Houston neighborhoods for millennial homebuyers here.

So, now that you’ve thought about the two questions, you’ve decided that you want to talk to a mortgage lender about financing.

Here are some tips to help you prepare for this important conversation:

Organize your finances
In order to be able to advise you correctly on the financing options and qualifications, the lender needs all the pieces of the puzzle. Before speaking to the lender, make sure you have prepared the following documents/information (depending on your situation):

  • Last two years W-2 (payroll and tax statements)
  • Any payslips or earnings stubs received in the last 30 days
  • Form 1099 (Pension, Self Employed, Disability Income)
  • Plan K-1 (Business Income)
  • All Internal Revenue Service forms
  • Information about student loans and other debt obligations
  • Bank statements for the past two months or most recent quarterly statements for each account where your deposit might have come from
  • Other assets and sources of income

Don’t worry if you don’t have some of the above documents as they may not apply to every situation.

The more transparent you are with the lender upfront, the better the lender will be able to serve you. If you feel it applies to your financial background/history, be prepared to speak up.

Determine your budget
Buying a home is a big undertaking, and it’s important to understand exactly what your current monthly expenses are. Take the time to review your spending so you can fully understand your current budget.

Your monthly payment is the driving force in your search. In addition to the mortgage, there are other monthly costs to consider when owning a home. Be prepared for the following:

  • household insurance
  • flood insurance
  • property taxes
  • housekeeping and maintenance
  • Additional costs (electricity, water, gas, internet etc.)
  • Homeowners association fees

Plan to speak to multiple lenders
When determining who to talk to about a loan, ask your friends and family who they used, and get a list of local lenders from your broker. You don’t have to use the bank where your checking account is!

Benson suggests starting the interview with 2-3 lenders to determine who you feel most comfortable with, and then proceeding to the application phase that you feel is a best fit for you.

Prepare to interview these lenders
Yes, the lender will ask you questions – mainly related to the two questions at the beginning of this article. That being said, you should have the attitude that you’re actually interviewing them to make sure they’re qualified and a good match for you.

A good lender will be patient and will answer your questions in detail to ensure you understand the process. If you are buying a home for the first time, be sure to ask about programs that can help you with your home purchase. A good team is crucial!

Don’t fall for teaser prices
When you start looking for a loan, you may see interest rates advertised online. Note that these interest rates are often based on criteria that don’t fit your individual profile, or apply to a loan that’s completely different from what you really want or need.

If you take the process of choosing a lender seriously, that person will put you in the best possible situation.

“Buying a home can feel like a daunting task, but if you prepare ahead of time and surround yourself with professionals, then you will be set for success,” says Benson. “You can do that!”

When you’re ready to start viewing homes, contact Harris Benson at 713-299-3015 or [email protected]

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