Why is Financing the First Step When Buying a Home?

What is the First Step When Buying a Home?

When people begin to entertain the idea of buying a home, they often want to start looking at homes right away. They may begin looking at real estate websites or even contact a Realtor. People often end up disappointed when taking this route. Lenders may not be willing to offer you the loan that you think you might be worthy of and you may fall in love with a home you are unable to purchase. Securing financing should always be the first step in the home buying process. Family First Mortgage in Lafayette, LA is here to help you with any questions you may have about the homebuying process.

Why Financing First?

Searching for your dream home can be an exciting time. Finding a loan to finance that home may seem like quite the opposite. Finding financing however is the most important step when beginning to shop for a new home. Unless you are fortunate enough to have enough cash to purchase your next home, you are going to need a loan. Lenders can be flexible with buyers, but they are not going to offer a loan if they think a buyer might not be able to repay it.

A lender will look closely at your financial history to determine how much they will offer you. Once this process is complete, you will have realistic price range outlined for you so that you can begin searching for homes you know you can afford. If you skip this step and begin looking at homes, you may fall in love with a home that is completely out of your price range.

Getting Started

Depending on how serious you are about purchasing home, there are two paths you can take. If you are just getting started and want to see what homes might be like in your price range, it may be best to consider a mortgage pre-qualification. Pre-qualification is a less formal evaluation of your finances in which a lender will provide you with a ballpark figure of how much you might be approved for. This is a great way to get an idea of how much you can afford without a complete financial review.

If you are ready to purchase a home, you will want to look into getting a pre-approval. A pre-approval is a much more formal evaluation of your finances. The amount you are pre-approved for is a promise for a home loan of that size from your lender. This allows you to shop for and make an offer on an home with 100% confidence that you will be able to afford the home.

Whether you are interested in pre-qualification or pre-approval, you will want to ensure your finances are in order. You will need cash for a down payment and will want to make sure your credit is the strongest it can be.  This will give you the best chance of getting approved for the loan you need to purchase the home you want. For more information on the pre-qualification and pre-approval processes, contact one of the experienced loan officers at Family First Mortgage today.