By Neal Smith

You’re finally ready to take the big leap! Every Sunday you pore through the real estate listings, admiring shaded patios and original plated-glass windows.  At open houses you envision the dinner parties you’ll host in the spacious dining room and the entertainment area you’ll set up in the finished basement.   Later, when you meet with your lender and find out that your dream home may be out of your price range, your disappointment is even greater since you have gotten attached to a home.  


My advice is always to meet with your lender first, as soon as you start to consider purchasing your new home.  What if, upon deciding to buy a new car, you went to the dealership to test-drive BMW’s, only to realize your budget only allows for a Honda?  Hondas are great cars—dependable and long-lasting—but you’ve gotten used to that luxury interior, and that’s a hard thing to forget.  Meeting with your lender first will save you time and heartache, sending you out into the marketplace with a clear understanding of your budget and options.  

Some buyers believe they know what their budget is from using mortgage calculators and other online tools.  These are great starting places, but meeting with a lender gives you a much more complete picture of your situation.  I have had clients, for example, tell me they have had a short-sale on their house, only to realize it was actually a foreclosure upon further investigation.  Other clients have come in with statements demonstrating substantial temporary disability income, without realizing that this income cannot be used as part of their household’s income calculation.  Determining how much of a loan a buyer will qualify for is complicated, and there are so many factors affecting it that the average buyer will not be aware of.  

Before embarking on your search for your new home, always meet with your mortgage professional first so that you will begin your search armed with an exact understanding of how much you will qualify for.  

Neal Smith   NMLS# 76186     NKS Financial     (916) 736-3575