Each mortgage lender (LendingTree is just one example) will scrutinize your financial background—such as your debt-to-income ratio and assets—and use this info to determine whether to loan you money, and what size monthly payment you can realistically afford. This will help you target homes in your price range. And that's good, because a purchase price that's beyond your financial reach will make you sweat your mortgage payment and puts you at risk of defaulting on your loan.
Typically, you have to put between 3 and 20 percent of your home’s sale price down in cash to qualify for a conventional loan (30-year fixed mortgage), but there are exceptions. If you meet eligibility guidelines, you might qualify for a home loan with a zero-down payment through Veterans Affairs (VA loans) or the Department of Agriculture (USDA loan) programs.
Pre-approval requires the lender to pull the credit information (see Step 1) and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you. If you get in a multiple-offer scenario, being pre-approved may give you an edge because the seller will have more confidence that you will be approved for a loan large enough to purchase their home.
Although 20 percent isn’t a prerequisite to homeownership, many buyers do put that amount down and then some. Larger down payents are more prevalent for buyers in the West (47 percent put down 20 percent or more) and the Northeast (52 percent put down 20 percent or more). This is because of tighter markets and the need to present a more competitive offer to a seller in order to win the home.
If your offer called for a home inspection, this is a big day. Sure, you get to have a home inspector look over the home to make sure there are no unseen defects you want to negotiate to have fixed. But more importantly, this is the most time you’ll get to spend in your new home until closing. Go ahead and start measuring things and figuring out what goes where. This may be the last time you are inside the home until it is yours, several weeks from now.
Highly desirable Alden Tract in West Hills. This lovely remodeled 3 bed 2 bath home features an abundance of natural light throughout. Newer laminate flooring in living room, hallway, bedrooms and kitchen; tile in bathrooms. All three of the spacious bedrooms feature good-sized closets with mirror sliding doors and ceiling fans. The brand new kitchen cabinets with all appliances included. Quartz counter tops with island open to living room. The large picture windows in the living room and dining area allow for perfect views of the lush back yard with beautiful flowerbeds. Perfect for entertaining with the covered patio providing shade in the hot summer days. Newer 4-ton central heat and air
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"Down payment": It's amazing that these two little words have such a profound influence on your homeownership process—and your life! Ask most people what is an acceptable down payment on a house, and nine times out 10 they'll tell you it's 20% of your home's selling price. So you do the math, figure you'd have to put down $50,000 on a $250,000 house, and break out in hives when you realize that the chances of your getting out of that tiny one-bedroom apartment are slim.
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