Marty and Max: Q&A to avoid first-time home buyer catastrophes

Sadly, this past week was the anniversary of the night that music died. AKA the avoidable plane crash that killed both Buddy Holly and Ritchie Valens. According to reports, the 21-year-old pilot departed around 1:30 a.m. and shortly thereafter encountered complete darkness and blizzard conditions at 15 degrees, and 36 mph winds. Air traffic controllers gave the pilot weather reports several times from 5:30 p.m. until takeoff. The pilot was only certified for clear weather, not Instrument Flight Rules. I have more experience flying in instrument conditions than this pilot had. Those who fail to learn from history are doomed to repeat it. This is the same cause of JFK Jr’s and Kobe Bryant’s fatal plane crashes. All three tragedies have one thing in common. The pilots ignored warning signs and the wise counsel of others. In the real estate world, costly mistakes are made every day resulting in heartbreaking losses. A wise man learns from his mistakes. A genius learns from the mistakes of others. When you can keep your head, when those around you are losing theirs, it may mean that you do not thoroughly understand the situation. 

Today, we have our subject matter expert, Alisha Neff from Idaho Central Credit Union (ICCU) and she is going to help us avoid some of the first-time home buyer catastrophes. 

Can you walk us through the process of getting pre-approved? What documents will buyers need to provide?

Most buyers are pleasantly surprised at how easy the process is. Buyers have the option to sit down with a loan officer face to face or they can also apply from their phone. We verify income, assets, and credit. Documents required include a recent paystub, W2s, and bank statements. If they don’t have these items readily available that is not a problem. We can get most income and assets verified through the application process itself.

What is the difference between pre-qualification and pre-approval?

A pre-qualification is something that you can provide to show that based on the information you provided, you will qualify for a loan. A pre-approval is where your information has been verified. 

What programs does Idaho offer that can help first-time home buyers purchase a home?

We are lucky enough to have IHFA (Idaho Housing and Finance Association) which provides many options for first-time homeowners. They provide various programs to help with down payments and closing costs.  Some programs require as little as half of a percent of the purchase price to get into a home!

 What are some common hurdles you see with first-time home buyers?

Many times, first-time buyers don’t have much credit established. This is something that I can easily give guidance on to get them in the best position possible to purchase a home. Another hurdle I see is not starting the process sooner.

 How are buyers able to get past those hurdles?

The sooner you start the pre-approval process the better you will be even if you’re a year out. It may be that you need to tweak a few things and work on your credit, or you may not know what you can afford which is very important. 

 What misconceptions do buyers have walking into the home-buying process?

Generally, I see buyers are overwhelmed with starting the process. Once you start it’s easier than you think. Buyers also have the misconception of not having enough saved for a down payment. Remember there are so many options for first-time buyers to help with the down payment.

 What should buyers NOT do once they have their pre-approval?

Do not buy anything using credit and do not do anything that requires a credit check. The best thing you can do once pre-approved is to keep everything as close to the same as possible. Do not open new accounts, do not change jobs, do not buy a new car etc. If you have ANY questions always reach out to your loan officer.

Is there anything specific ICCU provides that can be helpful to buyers?

We have so many different loan options including first-time buyers, investors, and people looking to buy their 2nd, 3rd, 4th home. We also have portfolio loan options that we’ve created to help buyers with specific needs. At the top of my list is our ability to pick up the phone or walk down the hall to talk to our underwriting and processing team. It’s so helpful to get an immediate answer. Everyone on our team truly wants to help our members.

As Don McLean best wrote, “I can still remember how that music used to make me smile … and maybe they’d be happy for a while.” Buying your first home gives you that same feeling. If you know anyone who lost their chance to buy their first home, it is the quintessential day “that music died.” Partner with a pro like Alisha to be your mortgage air traffic controller to ensure your soft landing so you and your motley crew can realize your, “Home Sweet Home”!

For your free market analysis, contact Marty Walker at marty@21goldchoice.com or text (208) 518-6636. This article was not written by and does not necessarily reflect the opinions of Coeur d'Alene Regional REALTORS®