This is going to be the shortest most compact course you’ve ever had on how to know whether you want to get pre-approved, use someone else’s credit so you can make that deal happen. Alright, man, you want to get out there and it’s time for you to crush it in real estate and pre-approval is one of the first things that you go to do so that you can know what you’re equipped with. You might be in a position right now to buy real estate based on your credit situation or you might not. Either way, as a bonus, I’m going to show you how you can get real estate no matter what. But first let’s talk about that pre-approval, let’s talk about how you make that happen.
Really, it comes down to the fact that we have all these banks and all of these banks are basically saying “What programs do we have for you?” And all these programs are a little different, they’re these lending programs and so first of all, you do need to know that not every bank is created equal. When I went and I was preparing to buy my first property, I was pushing the limit, I had barely two years of work history, I had just gone from part-time pay up to full-time pay and I walked into a bank that I had been banking with for years and by the time days later has done what the pre-approval process, guess what they did? They denied me.
And I’m like, crap! In my mind I’m like, are all banks the same? I went to another popular bank in the area, I went through that whole process and you know what, I got denied again. I only had a couple of weeks left to finish my loan before this house it is my first house this was going to create all this wealth that it has for me in my life and as I didn’t even know that at the time I just knew that I needed to get this deal done and that’s when I got smart and instead of going to a bank, I went to a broker. Now in lending broker is different, this is someone that works with many banks and I sat down with them I said I got a couple weeks left, I’m trying to buy this house. I know I’m just kind of trying to squeak through this bank turned me down, that bank turned me down and this is what they said “Not all banks are created equal and there are different programs for different people.” Let’s see your situation.
many banks is going to help you get pre-approved when maybe the bank you’re most familiar with is not capable of giving you an approval. Now listen, you can’t take it personal, banks are dealing with millions of people and at the end of the day, it’s just ones and digits and they like someone’s and digits better than others.
There are some things that’ll work with low credit ratings and other banks that won’t. There are some banks where they’ll say well you make a lot of money but it’s stated income and it’s not reported as a W 2 so we don’t like you and this other bank says we’ll do stated all day long so understand this first and foremost that people can get so discouraged in the lending process and you got to toughen yourself up and get some elephant skin on there and just not let that bother you so much, okay? And the reason why is because there’s all these banks and if you give up, you’ll never know what you were really capable of what you really could have done. Here’s what banks are going to look at: Number one, debt to income ratio.
They’re going to look at what are your ongoing monthly obligations that you owe people for like well you owe on this car rental and you owe on this and you all know on that student debt and then they want to know how much leftover income do you have after you pay your bills. Oh! That that will produce a debt to income ratio. How much debt do you have versus how much you make. And that’s something that they’re going to look at they’re also going to look at what you have for a down payment on a property. If it’s a home for you, I love taking advantage of the 3% and 5% down payment programs. You know on a $200,000 house 3% is 6 grand. But investor lending, you got to put 20% down. 3% versus 20% right? So, 3% that’s awesome, that’s smokin’ on, I can take you know, if you buy a house with $40,000 of equity and you put $6,000 down when that deal is done you’re gonna walk away feeling like a hero because you’re going to make a pile of money. They’re also going to want to know is this for you to live in or is this an investment. Because those are two very different banking systems.
The lending rates and the things that you get when you’re buying a home for you is more lenient with generally lower rates than buying an investment property. Because the bank will say what’s higher risk? Kris living in a house, or Chris putting someone else in the house. If it’s an investment properties, it’s higher risk. Your interest rate may be a full percentage higher, 1% higher, half a percent higher.
Money that you have in savings and banks going to want to know for you put a down payment, you’re going to have a little leftover in the bank and have three to six months worth of payments still.
Those are all the considerations that are happening in the bank sides. Now, before you go find a loan officer, I want to share two very important things with you, here’s the first one.. You need to have your debt to income ratio which means the money that is forcibly going out every month for obligations generally can’t be more than 50% of how much you make. If it is, you’re probably not going to get approved. The second thing is credit score. You got to have a credit score generally 680 or 700 or 720, some banks will work with you at a 620 credit score but if you’re in the 500’s, then you need to use the alternative bonus that I’m going to share with you a little later.
So you got to do some credit repair you got to get it your credit maintained and up a little bit. And down payment, you got to have enough for the down payment whether it’s 20% or 3% as well as five three, four, five, six months worth of payments in the bank. So let’s say that mortgage they’re going to be $800, the bank might want to see that after your down payment you still have three, four, five, six thousand dollars left over in the bank, they’re like, woo, something happens you lose your job, you got a couple months before you get your next job and you can still make your payment and we as the bank we’re not going down for it.
How To Get Pre – Approved For A Mortgage Home Loan
How to Get a Home Loan This is the stuff your mama didn’t tell you about this stuff your banker didn’t tell you about it and what your friends did. We’re Going Up and Getting Started When you start buying a real estate and this is the first place to start, you’re getting a home. If you want to get a home mortgage, you need to get a mortgage on it and you want to make sure you get the best deal. If you’re looking for a good deal, you’re probably going to get the credit for what you’re looking for. The best rates and the sort of thing you can do with a banking relationship These are the pitfalls of the avoidance of these pitfalls and the pre-approval process of what they want to do. How much money are you going to have and how much money are you going to get? If you are looking for a better home, you will be able to afford a better bank rate and you will have better pre-approval. ‘Re-buying it as your secondary residence or an investment is more risky than it might be if you think about going to the bank and you may end up with a very good living in the home. 3% down you can get lots of programs out of first-time home buyers but not just first-time home buyers but lots of programs Where you can get the equity in the home and you know that there is less risk every now and then, there is more property to be found in the property.
true second home or k at your investments you know if you own property elsewhere and you have some savings right now you have some savings to put down and that sort of thing is gonna make more sense The bank is looking for the risk of everything else that I have said so much less risky to look at and the bank is better than you are looking at a 401 K You’ve got a little bit of money left and you have been thinking about doing this for a while. ‘re a little bit more stable than somebody who is just walking down the street with a low score and some hiccups not saying that you can’t get property but the bank will treat you a little bit differently now want to tell you that is really gonna help you a lot of you know what the guy said and you go oh your local bank and that sort of thing and that local bank may or may not be able to help you but I’m gonna tell you this is what I see it may not be. A successful real estate agent is one of those people who has tons of deals to do because they know what they are actually doing. Different things and it’s the least amount of aggravation you need to apply for a loan you’re gonna have to fill out lots of paperwork and your bank records like a lot of stuff. If you’re a real estate agent who’s looking for a place to stay, then you’re right in the right direction with fewer hiccups. The deal is gonna go a lot smoother and you’re probably going to get a bet er rate and like our team members you know we have a lot of deals to help people buy and sell real estate right here with your team members with the right direction.