MOSES LAKE — Spring is just about here, and that’s the prime home-buying season, said Steve Tagnolli, vice president of home loans at Gesa Credit Union.

“Traditionally, it gets busier in March, April and May,” Tagnolli said. “There’s not many people who want to relocate during the holidays, not only because it’s the holidays but because of the weather in the wintertime.” 

Between 60% and 70% of home relocations take place during the summer months, according to Moving.com, both because the weather is better suited and so children can start a new school at the beginning of the school year. That means now is the time to talk to a home loan professional. Tagnolli said. 

“The best thing they can do is, three-to-six-months ahead of time, meet with a value-added advisor who can put them in a position to qualify to achieve that dream,” he said. 

The first step is to get pre-qualified, he added. Pre-qualification means a lender is tentatively willing to lend the borrower up to a certain amount of money. It’s not a guarantee, according to the Consumer Financial Protection Bureau, but it does give the prospective home buyer an idea of how much they can spend when they begin looking at homes in earnest. 

The home loan advisor will do a soft pull on the buyer’s credit report, meaning the check is free and doesn’t affect the buyer’s credit score. Then they’ll look at things like income, expenses and debt. 

“Do you have a car payment?” Tagnolli said. “What is your insurance? What is your current rent payment? Until (people) sit down with an advisor like that, sometimes they don't understand what their monthly obligations are.” 

A major factor will be the borrower’s debt-to-income ratio, the percentage of gross income – pretax earnings, Social Security, rental property income – that’s spent on recurring debts like rent, child support, credit cards and loans, according to Bankrate.com. The lower the DTI ratio, the better your chances of being approved for a loan. A lower ratio can also enable you to get a better interest rate on a mortgage. 

A higher DTI ratio doesn’t necessarily put a borrower out of the running, Tagnolli said. 

“(With) a lot of conventional loan programs, the DTI (required) is 43% but there's a lot of portfolio lenders, banks, credit unions (that) can go up to 50% DTI,” he said. “That's another reason they should meet with a home loan officer so we can articulate and explain to them how that works.” 

Many people start off with the assumption that they need to have enough money in the bank to put down 20% on a loan, but that’s not the case, Tagnolli said. There are programs that will allow a buyer to buy a home with lower or even no down payment, although that may mean a higher interest rate and hence a higher monthly payment. 

“That’s why it benefits them to meet with a home loan officer,” Tagnolli said.”We can tell them ‘If you put 20% down, this is your payment. If you only put 10% down, your payment would be a little higher because of this and this.’” 

There was a time when the conventional wisdom was that a buyer should go for the most home they can afford, but that’s not the case any longer, Tagnolli said. 

“A lot of economists felt like home values are going to appreciate over time, so it's a great investment in your future,” he said. “It's not just a place to live, but it can be a great investment. But the market always changes. There's ups and downs … Sometimes people find a good house on Zillow, but (it’s not a good fit) given where they are in their life. Do they have kids? Are the kids almost out of the house? Do they want single-level? Do they want two-story? … People have come back 15 years later and said, ‘I wish I bought a single-level house, because now I'm in my 60s. I'm getting close to retirement, and my bedroom’s upstairs.’” 

The big mistake many people make is assuming they can’t afford a home, and never will. That’s something a mortgage professional can help with, Tagnolli said. 

“One of the most rewarding things we've experienced is meeting with a (potential borrower) today, advising them on the process and then seeing them come back a year from now and qualify for a home loan,” he said. “The local banks and credit unions in the Northwest, we all provide that service for free. They can get a free consultation anywhere, and if they're not qualified today, we can tell them what they need to do to qualify in the future.”