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Joseph Villaescusa: How New Homeowners Prepare for Loan Approval

Carrying more than 26 years in the real estate industry, Joseph Villaescusa serves as a top-rated broker and CEO at CENTURY 21 Allstars—a comprehensive firm based in California. Having thoroughly invested in the real estate industry as a business executive, Villaescusa is focused on reminding consumers of the merits on buying property and how it can be achieved strategically. While many Americans have life-long dreams of owning a home, he explains that it is important for serious consumers to take more control over their preparation to purchase, such as by applying for mortgages effectively.

The Changing Real Estate Market and Mortgages

As a result of the most recent recession and the countrywide foreclosure crisis, many consumers have become more cautious of their attempts to seek mortgages. In addition, financial institutions and lenders have introduced a series of regulations that have made it more difficult to achieve a desirable loan. However, Joseph Villaescusa observes that as the American economy recovers, many lenders have begun to ease up on mortgage requirements, and consumers are becoming more informed about how to apply for loans intelligently. As a result, those who are prepared can face greater satisfaction in achieving loan approval.

Tips for Mortgage Application

Believing that awareness is a major cause behind improvement of mortgage process literacy, Joseph Villaescusa urges all prospective homeowners to take note of the following tips to boost approval status and loan amount:

Get an Early Start

According to Joseph Villaescusa, it is never too early for consumers to start preparing for homeownership. He states that those who are more equipped to apply for desirable home loans can avoid having to extend status as a renter in a market where rental rates continue to exceed monthly mortgage payments. One of the best ways to get a head start is to start saving up a financial fund for homeownership costs; the greater amount one has to put down on a home, the less they will need in their mortgage. As a result those who have taken exhaustive efforts to save will find themselves not only getting more favorable loan conditions, but also possibly securing a more desirable home.

Even if one is unable to start an individual savings account for a future home, there are other ways to prepare for homeownership. Not only should homeowners become educated on what homeownership requires, but they should develop an understanding of what they want to eventually own and what they will need to comfortably afford it. In addition, it is vital to become familiar with the many mortgage types that are out there, including fixed-rate, adjustable rate and government-backed loans.

Resolve Credit Issues Immediately

According to Joseph Villaescusa, poor credit scores and financial histories can make it incredibly difficult for consumers to secure favorable loans. By taking aggressive measures to pay down debt, many can improve their credit ratings drastically.

However, Joseph Villaescusa notes that some who may not have debt may still be impacted by errors in their credit history. As such, it is recommended that any individual who wants to own a home in the near or distant future get a copy of their credit report. Since it can take some time to fully mitigate credit issues and build a respectable credit score, the earlier one takes this step, the more likely they can achieve the home of his or her dreams.

Apply for Loan Pre-approval

It is a common misconception among new homeowners that the time to apply for a loan is when one is ready to make an offer on a listed property. Not only will fresh loan applications slow down the buyer process—and limit potential of closing—but sellers will prove less confident in those who do not carry pre-approval.

Fortunately, home loan pre-approval is easy if an individual takes simple steps with their bank or selected lender. This pre-approval will give the prospective buyer an opportunity to see how much property they will be able to afford, as well as prove more serious in their interest in available homes. Even if one has not found his or her desired property, Joseph Villaescusa says pre-approval is a good step to take to better prepare for the journey ahead. However, it is important to note that pre-approval letters can expire after a few months.

Joseph Villaescusa Identifies Benefits of Home Loan Pre-approval

From a competition standpoint alone, loan pre-approval can offer a serious advantage to first-time buyers. According to Joseph Villaescusa, this is especially vital in the current market that is defined by higher rates of housing demand nationwide. However, pre-approval can offer much more than confidence to the seller.

Having an idea of what one can afford, it is also much easier for potential buyers to focus on the properties that are in their price range. Pre-approval letters will also allow them to gain better insight from a real estate professional.

In addition to these benefits, home loan pre-approval can also encourage speedier closing. While there are many factors that impact the length of closing on a house once an offer has been accepted, pre-approval helps the buyer cover his or her financial needs ahead of time. According to Joseph Villaescusa, fast closings are often essential for new homeowners so that they are able to move in at the desired time and not incur costly and inconvenient delays.