Kathy Henne: An Ocean of Options

As a buyer, you may find yourself drifting on an ocean of financing options. Lenders have tightened their requirements. There are a few aspects of the loan application of which you should be aware before starting your home search.

First, determine which lender you want to use for your pre-approval. In the pre-approval process, the lender verifies everything on your application, and offers to approve a certain amount of money at a certain interest rate. The final loan is only cleared upon receipt of an acceptable appraisal, title check, last-minute credit check, and other verifications. A pre-approval puts you on a stronger buying ground with the seller.

A critical aspect of your application is your credit score. Excessive credit, like car loans and high balances on credit cards, can sometimes prove as unattractive to lenders as bad credit or no credit, so make sure that you have plenty of credit available before applying, and put off major purchases until after you’ve bought your home.

The bank will require a last minute credit check right before your closing. If you decide to buy or lease a new car right before closing, you may find that your loan will not get the final approval and the closing will be cancelled. The bank will also do a last minute employment verification just to make sure you’re still employed and can make the payments on the loan.

Always request the guidance of your real estate agent who is well versed in the current real estate market and can recommend great local lenders to help you.