If you were buying a home wouldn’t it help to know what your payment will be and how much cash is needed to close the transaction? If you agree that this information is important BEFORE shopping for a home, you should know that a lender is not required to give you a Loan Estimate without having an application, which includes a property address.
So how do you get this information? The Consumer Protection Finance Bureau has a pamphlet called Your Home Loan Tool Kit. In this pamphlet is a worksheet that helps you define a budget and identify the amount of money you have towards the purchase. Once you have a good understanding of what you can afford, the next step is to get with a person who can help you understand the different loan options available to you.
Some things to keep in mind when selecting a lender. Do they have multiple loan programs to choose from? For example, if you have VA benefits, you want to see both the VA loan option and a Conventional loan option. Another good question to ask is whether they finance condominiums or manufactured homes. Don’t assume all real estate is the same because it isn’t! Finally, some lenders have application fees in order to obtain a pre-qualification, which in Arizona is required to make an offer on a home.
After you have selected a lender and provided them the information necessary to get a pre-qualification, it is your responsibility to discuss estimated monthly payment and overall cash to close. Often times a lender will provide you with the maximum amount you qualify for. Unfortunately, that could far exceed the amount you budgeted for.
If you dig deep into Your Home Loan Tool Kit, you will find it’s the home buyers responsibility to know what they can afford and that they have enough cash for the transaction. A lender’s job is primarily to confirm that what you desire is possible; that you would qualify for the loan.
Home ownership is a big responsibility and the internet can provide you with much of the basics. It by no means however can confirm what you qualify for and whether you are eligible to get the loan. That only a licensed Mortgage Professional can confirm for you.