Welcome to the series of posts helping Introverts with buying a home, selling a home or investing in real estate. I tend to be an introvert more than an extrovert so I thought it would be appropriate to give some advice to others like me on how they can succeed in real estate without having to go outside their comfort zones.
What is an introvert? An introvert is a person who gains more energy through internal ways versus externally from people and/or their surroundings. Introverts are not shy or afraid of talking to people. In fact, some of the best conversationalist I have ever met were introverts. It is just that introverts like self-reflection and gain energy from doing activities on their own. For me, I vary in my energy levels for certain activities. I get energy from inside me and from other people. It depends on my mood. One last thing to remember about introverts. We like to be in social situations with structure and cohesion. We don’t tend to like impromptu meetings or social gatherings.
This series of posts will cover every stage of the process of buying a home. I will give some tips on some tools and tricks introverts can use to make each step as efficient and streamlined as possible. Hopefully, introverts can utilize these tools to help them control the situations as much as possible. When you are done reading this post, you should also think about reaching out to me through my contact us page so we can set up a time to chat.
The first step in buying a home is to get preapproved for a mortgage. The three online tools below will help you find a mortgage provider and figure out a good budget for buying a home.
1. Get a Copy of your Free Credit Report – Before approaching a mortgage company, it is always a good idea to look over your credit report. Why do you want to do this? Financial institutions report to the credit bureaus any loans taken out in your name and your progress on paying off this debt. Based on how well you do paying off the debt (and some other factors), you get assigned a credit number indicating your credit worthiness. Mortgage companies will use your credit score as a way to gauge your ability to pay back the loan you take out to purchase the house. Different loan programs will have different minimal credit scores required to get a loan. You have to have a minimum in the higher 500s to get a loan(max credit score is 850). The mortgage provider will also look over your debt to income ratio. This shows how much monthly debt you have compared to your monthly income. The maximum debt-to-income ratio most mortgage providers will allow is 43%. Credit scores also dictate the interest rate you will get from the mortgage company. Because the mortgages providers rely so heavily on your credit report to qualify you for a loan, you want to make sure you look it over before approaching one so you prepared for the discussion. The USA government allows each person to get one free credit report a year. You can pick up the report at Annual Credit Report.com
Bonus tool – Guess what? Credit agencies will have incorrect information reported to them from the different financial institutions. What do you do if you find an error? You do have options. You can find out about these options from this great article written by the Federal Trade Commission. It is well worth the time and effort to take care of these errors before trying to get a mortgage. A slight rise in your credit score can save you a lot of money in interest payments!
2. Get Market reports on Interest Rates – You now know what your credit report looks like and you are working on getting your credit score up by getting errors and omissions corrected on the report. While you do this, the next logical step is to start looking at market reports on the terms you can expect to get offered by the mortgage providers. Bankrate is a great place to get an idea on current mortgage rates and mortgage loan programs. The first thing you want to look at is what is the average interest rate at the moment. Because of the recent raising of interest rates by the fed (and other economic considerations), we are seeing a steady rise in the average interest rate. In May 23, 2018, the average interest rate was 4.8%, which is up from 4.58% earlier in the month. How do you know if you are getting a good rate? Bankrate says that a good rate should fall below the average and to get the best rates you need a credit score of 760 or higher. Be sure to look at other aspects of the mortgage program. You want to look at the APR, fees and any points you have to pay to get a good interest rate. The best mortgage program might not be the one with the lowest interest rate.
Bonus tool: What did all that mean in the last few sentences? How do you find out more about these terms? Our friends at the Federal Trade Commission has written another great article on what all these terms mean. It is well worth the read so you are well-educated before approaching a mortgage provider.
3. Find a mortgage provider – You have your credit report and credit score where they need to be to get a mortgage. You have an idea on the parts of a mortgage and what you can expect in terms of an interest rate. The next step is to find a mortgage provider. As an introvert, I am sure you want to find one that will allow you to apply online and then set up a time for a follow up phone call. You are in luck! Most of the major mortgage providers allow you to fill out the initial application online. In fact mortgage companies have caught on that most of us prefer less interaction when it comes to getting a mortgage so many of them have set up some elaborate online infrastructures to get through the entire process. My favorites are the ones that show you step-by-step where you are and what you have to do next. If the mortgage company doesn’t provide this type of online guidance for you, I would avoid them. You will have plenty to pick from that do offer it. The best list I have ever seen for mortgage providers is on Zillow. They have a neat wizard that will ask you several questions and then recommend some lenders. You can also look at a laundry list by clicking on the lender reviews if you are not ready to give out information yet. Good luck!
Bonus tool: Need some help in trying to filter through all the hundreds of options? Bankrate comes to the rescue with this article on how to find the best mortgage providers by providing a good step-by-step instructions on what you need to do to find the best one to fit for your needs.