Joe Kulle and Katie Riley - Heritage Homes Real Estate



Posted by Joe Kulle and Katie Riley on 9/8/2019

While buying a home is a huge decision that should entail a lot of planning and preparation, applying for a mortgage can be surprisingly easy. Just like with other lenders and creditors, a mortgage lender will want to know that letting you borrow money will be a safe investment. Applying for a mortgage is all about ensuring just that.

In today’s post, we’re going to breakdown the home loan application process to help you have the best chances at a smooth and successful mortgage approval. We’ll also define some of the common terms used in mortgages that might leave you scratching your head so you have a better idea of what your options are.

Prequalification and Preapproval

Getting prequalified and preapproved for a mortgaged can both be helpful steps toward securing your home loan. The two terms mean two entirely different things, however.

In order to be prequalified for a mortgage, you typically need to only fill out a simple form (sometimes directly through a lender’s website). On this form, you won’t need to provide specifics or official documents.

Why is this process so simple? Well, that’s because getting prequalified for a loan doesn’t ensure that you’ll actually receive one. Rather, it is simply the first step toward finding out what type of mortgage and interest rates you could receive.

The next step after prequalification is preapproval. To get preapproved, you’ll have to fill out an official mortgage application. Your lender of choice will request a few pieces of information from you, including tax returns, proof of employment for the last two years, and a list of your debts. The lender will also perform a credit check to determine your loan eligibility.

Credit report

At this phase, lenders will also run your credit report. This is a type of “hard credit inquiry” that details your payment history, the number of accounts you have open, and other factors that help make up your credit score.

To secure the lowest interest rate possible, it helps to have a high credit score. So, in the years and months leading up to your mortgage application, focusing on building credit will pay off.

To increase your credit score, you’ll need to focus on paying your bills on time each month. You should also avoid opening new accounts within a few months of applying for a mortgage because this will count as a new credit inquiry. New credit inquiries--including applying for a mortgage--lower your score temporarily, so it’s best to avoid them when possible.

Additional paperwork required for mortgage applications

Not every mortgage application will be the same. Depending on the type of income you receive, you may need to provide different forms of income verification.

Each person will also have to claim different debts and assets. When buying a home with a spouse or partner, it’s important to consider your debts, assets, and credit scores to determine if it’s better to apply jointly or separately.





Posted by Joe Kulle and Katie Riley on 6/11/2017

We’re not taught much about homeownership when we’re young. Like paying bills and taxes, it’s something we’re all expected to pick up along the way. But with something as important and expensive as buying a home, there should be a guide to help first time homeowners determine if they’re ready to enter the real estate market.

Today, we’re going to attempt to provide you with that guide. We’ll offer some of the prerequisites to homeownership to help you determine if you’re ready to buy your first home.

A rite of passage

Buying a house is a significant moment in anyone’s life. It’s often a precursor to starting a career, a family, and settling in a part of the country you will likely call home for a large portion of your life.

It’s also overwhelming.

There’s much to prepare for before buying your first home. You’ll be calculating a lot of expenses, thinking about jobs and schools, and learning new things about home maintenance. Here are some things to think about before buying your first home.

Can I afford it?

The most obvious question first time buyers ask themselves is whether they can afford a home. What many don’t ask, however, is if they can afford all of the unexpected expenses that come with homeownership.

Everyone knows they’ll be making mortgage payments. But to decide if you can really afford a home you’ll have to make a detailed budget. Here are some other expenses to consider:

  • Mortgage closing costs

  • Property tax

  • Home insurance

  • Maintenance and repairs

  • Home improvement

  • All utilities

  • Moving costs

Do I plan on staying in the area?

When you buy a home, you’re not just committing yourself to the house itself, but also to the area you live in. Typically, it only makes sense to buy a home if you’re planning on staying in it for a number of years (usually five or more). Ask yourself the following questions to determine if you can truly commit yourself to your area.

  • Could my career lead me to transferring to another location?

  • Could my spouse’s career lead them to transferring?

  • If children are in the present/future, is the local school district what I’m looking for in terms of education for my child?

  • Will I want to move live to family?

  • Will I have to move soon to care for aging parents?

  • Do I like the weather and culture in the area?

Is my income stable?

Owning a home is much easier when you have a stable income or two stable incomes between you and your significant other. It help you get preapproved for a mortgage and help you rest easy knowing that you can keep up with the bills each month to maintain or build your credit.

Stability doesn’t just mean feeling comfortable that your company won’t get closed down or that you’ll be dismissed from your job. It also means that there are frequent openings in your field of work in the area you choose to live. So, when planning to buy a home, make sure you factor in the potential travel distance to cities or places you could potentially work.

Am I prepared to put in extra work?

If you currently rent an apartment, you’re most likely not responsible for maintenance outside of basic cleaning. Owning a home is a different story. You’ll be taking care of the house inside and out. That means learning basic maintenance and buying the tools for the job.

It also means mowing the lawn, cleaning the gutters, shoveling snow off of the roof, and other menial tasks that you’ll need to make time for.





Posted by Joe Kulle and Katie Riley on 5/14/2017

As a first time home buyer, you may feel like a fish out of water when it comes to the process of getting a home. If you’re ready to buy your first home, there’s some key mistakes that you should avoid. 


You Think That You Don’t Need Help From A Professional


So many homebuyers think that they can save themselves a few dollars by avoiding working with a realtor. This is a big mistake. Realtors are a valuable resource for buyers and will help you throughout the process of purchasing a home. Realtors can help guide buyers step-by-step while providing assistance with things like negotiations and making sure all of the paperwork gets from point A to point B. You’ll also need other professionals involved in this process of home buying including lawyers and loan officers. Having these people on your team protects you and gives you a backing of knowledge that you wouldn’t otherwise have. 


Don’t Skip Pre-Approval


Getting pre-approved for a mortgage is key before you even start to search for a house. The pre-approval letter is a great resource in helping you land the home of your dreams. If you’re going up against other bids on a home, your bid will be seen as more serious if you have been pre-approved. Getting a pre-approval lets sellers know that you’re serious about the whole process of buying a home and are ready to make the financial commitment. 


Know The Costs Associated With Buying A Home


Just because you have the monthly income to pay a mortgage doesn't mean you’re financially ready to buy a home. There’s a few things that need to be in place before you can even commit to buying a home. First, you’ll need to make sure your credit score is up to par. Next, you’ll need to have enough saved up for a down payment. Without a down payment of at east 20% of the purchase price of a home, you’ll need to pay for private mortgage insurance (PMI). There’s plenty of other costs that you’ll need cash on hand for when it comes to buying a home. This includes home insurance, home inspections, closing costs, property taxes, HOA fees, and maintenance. In other words, there needs to be some wiggle room in your budget for all of the extra costs that go into closing on a home and maintaining a home. 



Don’t Completely Deplete Your Savings


Just because you have been saving up for years to buy a home, doesn’t mean you need to completely deplete your savings in one pass. If you lack an emergency fund, you’re not buying a home with a responsible financial cushion. While you’ll probably take out a good chunk of savings in order to purchase the home, you need a bit more. Experts say that you need about 3-6 months of expenses saved up in case of the event of illness, job loss, or other emergency. Hence the name “emergency fund.”