Here's a quick tip on how Alexandria VA homebuyers can get a leg up on the competition once they enter the market to buy a home.
Imagine you've narrowed your zip code search for homes to homes for sale in 22314 in Old Town Alexandria VA, or decided to focus on Del Ray. These popular areas are still seeing multiple contracts or bidding wars on the right home. From the entry level condo market, to the mid-level prices of $600,000, buyers in all price ranges need to be prepared, and the mortgage approval is that very necessary first step.
Meeting with a lender is more than simply visiting a financial website and using the calculators to see what you can afford. Mortgage loans and interest rates are credit score driven, and the higher your credit score, the better your interest rate. For example, did you know that for every 20 points that your credit score is off, you could pay an extra 1/4 percentage in interest?
When you meet with a local, reputable lender, and complete a mortgage application, the lender can check your credit report. If you're serious about buying a home in Old Town Alexandria or Del Ray, then having your credit pulled is required (unless you're paying all cash). For a lot of first-timers, this can be a money saver because the lender may help you identify errors on your credit report, that once corrected can raise your score (in other words, meeting with a lender can actually save you money!).
A good lender will also explain several different loan types and after listening to your long and short-term goals, will be able to suggest the best loan. For some buyers, an interest-only loan is best, for others, the traditional 30-year fixed is the better solution. Different people have different situations. Those on a fixed, predictable salary may require a different loan than someone self-employed and paid on a commission basis.
You should also receive a Good Faith Estimate of Closing Costs which outlines what the lender will charge to secure your loan. Be sure to review different scenarios and varying sales prices. Homes for sale in Old Town Alexandria VA and Del Ray can range anywhere from the high $100's to the millions. You'll need to know what the price range is that will allow you to stay within your monthly comfort zone for your total housing payment.
And finally, your approval letter is your official GREEN LIGHT to shop for a home. An approval letter or a mortgage application does not bind you to any lender, nor does it obligate you to purchase. But as part of the information gathering process the approval letter tells your Realtor that you're serious enough about the process and gives you the comfort of knowing you have the financial ability to move forward when you find an Old Town Alexandria VA or Del Ray home for sale that you like.
Bonus Free Report: 10 Questions To Ask Your Lender