Buy a House Fast

The common wisdom these days dictates that you get pre-approved for a loan before you get too far into the home-buying business. In this process, you submit your paystubs, W-2s, bank statement, and investment statements to a lender who will tentatively approve you for a loan up to a certain dollar value.  The statement from the bank, called a good faith estimate (GFE), will lay out the amount, terms, interest rate, type of loan, and closing costs.  A prospective home buyer might even seek several GFEs in a short time to compare what is available for someone with his credit profile. Some banks might approve a person for more than other lenders might.

Real estate agents like to see prospective buyers with GFEs in hand to zero in on homes at the right price-point and to make sure that they aren’t wasting their time on unqualified dreamers. Sellers who have been praying for a buyer are overjoyed when the buyer appears ready to go.

Unfortunately, it is premature to start packing and planning the housewarming party.  The “G” in GFE does not stand for “Guaranteed.”  When the buyer settles on a specific property, the lender could refuse to actually offer a mortgage for a number of reasons.  The property might not appraise right.  The market might have changes.  Circumstances for the buyer might have changed, such as a job loss or a drop in income.

This realization should be sobering to buyers.  Some things in life are a big surprise or out of one’s control. One thing buyers do have control over is their use of credit in the period between initial pre-approval and closing.  Increased use of credit during this time affects the debt-credit ratio used to determine credit-worthiness.

If you have found a great home and are waiting for things to fall in line for the closing, your natural impulse might be to shop.  You’ll need appliances and you may use the move as the perfect time to buy a new bedroom or living room set.  If you put these purchases on your credit card, you could end up with no home to put them in, especially if your debt-credit ratio is a bit high to start with.  To avoid jeopardizing your loan, your choices are to wait for the purchase, pay cash, or buy from a place that has a deferred financing option.  If you need a car, definitely put off that major purchase until you have keys in hand.

Need a REALTOR® to help you find a home and give you the best advice to reach a successful closing?  Express Realty Services offers a variety of renovated, refurbished, and remodeled homes in the Washington, DC area, including Maryland and Virginia.  Because we sell so many homes, we can help you find a first-rate mortgage lender with loan products and experience that are right for you.  Contact us today!