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| Home Loan Lending: Is It Find The Home And Find The Loan... Or Find The Loan And Find The Home? Home Loan Lending Article By Noel Peebles |
Most home buyers go about the process of buying a home the wrong way! That is; they spend weeks, months and
sometimes even years, searching real estate listings, driving neighborhoods and visiting open houses looking
for the perfect home. Now I hear what you are saying. Surely, that is the logical thing to do? Isn't it? After all, the
buyer gets to know what's available and which properties are for sale at a fair market price. Unfortunately, that is
not usually the best way to go about things.
Now don't get me wrong - property searching does provide useful and essential research. The trouble is; doing that
first, can mean doing things back to front. Why? Because, once the buyer has found the home of their dreams, they
place an offer to purchase the property subject to obtaining a mortgage loan. It is only at that point that many home
buyers consider their home loan lending options. That's where things can come unstuck...
sometimes even years, searching real estate listings, driving neighborhoods and visiting open houses looking
for the perfect home. Now I hear what you are saying. Surely, that is the logical thing to do? Isn't it? After all, the
buyer gets to know what's available and which properties are for sale at a fair market price. Unfortunately, that is
not usually the best way to go about things.
Now don't get me wrong - property searching does provide useful and essential research. The trouble is; doing that
first, can mean doing things back to front. Why? Because, once the buyer has found the home of their dreams, they
place an offer to purchase the property subject to obtaining a mortgage loan. It is only at that point that many home
buyers consider their home loan lending options. That's where things can come unstuck...
Home Loan Lending -
What To Shop For...
It is usually best to consider
the home loan lending
options BEFORE putting an
offer on a property. All too
frequently, the bank or
other home loan lending
institution declines the
home loan application. The
property falls outside the
home loan lending criteria
and is deemed to cost
more than the buyer can
afford.
What To Shop For...
It is usually best to consider
the home loan lending
options BEFORE putting an
offer on a property. All too
frequently, the bank or
other home loan lending
institution declines the
home loan application. The
property falls outside the
home loan lending criteria
and is deemed to cost
more than the buyer can
afford.
The home buyer therefore loses the chance to buy the dream home they searched so hard to find. The deal falls
through simply because the home buyer couldn't finance the purchase the property. The home buyer is frustrated,
the seller is frustrated and so is the inexperienced agent who chauffeured the buyer around for all those months.
Get the order right: Hunt the loan before the home!
The savvy buyer is the one who shops around for the home loan first. By consulting home loan lending institutions,
the home buyer knows exactly how much he or she can (or can't) afford. The home buyer can then confidently
seek out only properties that are within their pre-qualified home loan lending price range.
The big advantage in pre-qualifying for a home loan is that it puts the buyer in a much stronger negotiating
position. The fewer conditions of sale that are included in the contract the better.
The seller is likely to take a buyer with a secured a home loan commitment far more seriously, than they will a
buyer who may need to have a home loan approved.
There are two methods of applying for a pre approved home loan. The standard way is to supply a home lending
agent with your financial and credit history. The home lending agent will then "crunch the numbers" and "run the
ratios" to calculate the level of borrowing that can be approved. A major flaw in this scenario is that the borrowers
often forget to reveal all. They (conveniently) forget to tell about their 4 overdue credit card payments,their new
car payment or they push their income figures beyond reality.
The preferred method is to first complete an application and provide income and employment records. The home
lending agent would then run a credit report and actually submit the file to a wholesale home loan lender for
underwriting before receiving approval and commitment for a home loan.
Home Loan Lending Commitment
The message is simple; get a home loan commitment first, then find your dream home. Getting the order right will
save you money when negotiating the contract. And, not forgetting, it is a powerful negotiating tool when
presenting an offer to purchase.
As an African safari guide once told me, "you don't go tracking a lion, find him and then worry if you have any
bullets in your gun!"
By the way - we weren't hunting lions to shoot… we just didn't want to be eaten alive!
© Noel Peebles, Market Leaders ebooks.
through simply because the home buyer couldn't finance the purchase the property. The home buyer is frustrated,
the seller is frustrated and so is the inexperienced agent who chauffeured the buyer around for all those months.
Get the order right: Hunt the loan before the home!
The savvy buyer is the one who shops around for the home loan first. By consulting home loan lending institutions,
the home buyer knows exactly how much he or she can (or can't) afford. The home buyer can then confidently
seek out only properties that are within their pre-qualified home loan lending price range.
The big advantage in pre-qualifying for a home loan is that it puts the buyer in a much stronger negotiating
position. The fewer conditions of sale that are included in the contract the better.
The seller is likely to take a buyer with a secured a home loan commitment far more seriously, than they will a
buyer who may need to have a home loan approved.
There are two methods of applying for a pre approved home loan. The standard way is to supply a home lending
agent with your financial and credit history. The home lending agent will then "crunch the numbers" and "run the
ratios" to calculate the level of borrowing that can be approved. A major flaw in this scenario is that the borrowers
often forget to reveal all. They (conveniently) forget to tell about their 4 overdue credit card payments,their new
car payment or they push their income figures beyond reality.
The preferred method is to first complete an application and provide income and employment records. The home
lending agent would then run a credit report and actually submit the file to a wholesale home loan lender for
underwriting before receiving approval and commitment for a home loan.
Home Loan Lending Commitment
The message is simple; get a home loan commitment first, then find your dream home. Getting the order right will
save you money when negotiating the contract. And, not forgetting, it is a powerful negotiating tool when
presenting an offer to purchase.
As an African safari guide once told me, "you don't go tracking a lion, find him and then worry if you have any
bullets in your gun!"
By the way - we weren't hunting lions to shoot… we just didn't want to be eaten alive!
© Noel Peebles, Market Leaders ebooks.
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Mortgage Bridge Loans \ Mortgage Refinance Loans \ Home Equity Loans \ Mortgage Terms Explained
