When you’re looking to purchase a home, it’s easy to get hung up on finding your dream home and neglect to learn about how to pay for it. Let’s get your home buying venture started off on the right foot by looking at how to get pre-approved to buy a home in Santa Cruz.
Do a Credit Check
Before you start getting into finding a lender or applying for anything, you absolutely need to request your free annual credit report from the major credit agencies.
Once you receive these credit reports, go through them from front to back and scrutinize every single detail heavily. You are looking for any possible errors as well as remaining debts from your past that you may have forgotten about.
Credit agencies have ways for you to dispute any errors and they will follow their usual procedures in order to verify any disputes you may present. With your credit report cleaned up, you’re in the best possible shape you can currently be in to bring in a lender.
Shop Around for Your Lender
Just like homes and real estate agents, not all mortgage lenders are equal. The important thing is that you meet with a few of them in order to fully understand what they can do for you and how much they are willing to work with you.
It’s easy for a homebuyer to feel they are in a position leaving them unable to ask questions, but your lender ultimately works for and with you to make this purchase a success. Don’t be afraid to ask questions or push for a lowered interest rate if you feel you qualify.
The worst-case scenario is you are told no or are given a confusing or incomplete answer to your question. If that ends up being the case, perhaps another lender is a better choice for you anyway to help you buy a home in Santa Cruz.
Fill out the Application
Each lender’s application process may differ slightly, but you can expect to fill out an online form that requires your personal information along with some basic information of the property you are looking to buy.
Depending on the lender, they may ask for your most recent pay stub to verify your income and employment status or your most recent tax return. At this very early stage a lender will oftentimes try to pull any additional information they need without your involvement to save time communicating back and forth.
Give the Lender What They Need
Once your application has gone through the initial stages of pre-approval, you will usually meet with your first point of contact with the lender who will be handling your case from here onward.
Get to know the case manager a bit and they will likely then begin requesting more documentation from you as the approval process continues. We previously mentioned you may need to provide your latest tax return or pay stub but you may also need to give them your latest bank statements, a rental history, or any letters from parties gifting you large sums of money recently.
Some of these may sound a little strange but it’s all part of building a financial profile to determine the level of risk the lender is taking on if they are to approve your loan to buy a home in Santa Cruz.
Get a Pre-Approval Letter
Finally, after jumping through hoops and cooperating with your lender, they will pre-approve your loan and send you a pre-approval letter.
This pre-approval letter carries weight with sellers and can help turn the tables during negotiation. The reason it has this power is that it states that you are in the final stages of receiving the funds to purchase that exact property, and your lender has faith in you to close the deal and move forward with their loan.
Help Getting Financing to Buy a Home in Santa Cruz
If you’re looking for help to buy a home in Santa Cruz, regardless of whether or not you’ve got financing squared away, contact our team at 831-588-2334!