Before you begin the search for your ideal home, however, it is essential that you initiate the loan pre-approval process with an experienced Mortgage Broker. This involves filling out a mortgage application and allowing a licensed financing professional to research your credit history, current financial status and your personal goals. This is achieved through discussions on questions about your income, debt, assets and future plans. Once your details are verified and processed, you will receive a pre-approval which establishes the maximum loan amount that you will qualify for a home purchase.
Your pre-approval will give you credibility as an interested buyer that lets the seller know that you are serious about a home purchase. Additionally, it will also tell them that you already qualify for a loan to purchase their property (if you choose to move forward and submit an offer to purchase their home).
In today’s market, home sellers want evidence that their prospective buyers have the financial means to close a deal in a timely manner, and conversely, you want to have the clout of a buyer ready to make a deal immediately. As a prospective home buyer, being pre-approved demonstrates that there will be no unexpected obstacles to purchasing a home and that (in and of itself) makes your offer much more powerful. When you have your financing in place, you have demonstrated your motivation to purchase a home and that can give you an edge over other prospective buyers who may not have the financial means to close the deal.
TO REVIEW:
Why Bother Getting Pre-Approved?
- Most sellers require it in order to entertain your purchase offer.
- By finding out exactly what property price range you can focus on, you won’t waste your time searching in the wrong price tier or fall in love with homes that are beyond your financial means.
- On the practical side, would you want to accept a contract on your home if the buyer wasn’t pre-approved?
Getting Pre-Approved Enables You To:
- Determine which type of programs you qualify for and which loans best suit your needs.
- Investigate special first-time home buyer programs that may allow you to afford more home for your money.
- Address any surprises and discrepancies that may be present on your credit report.
- Take the opportunity to boost your credit scores so that you may be able to obtain a more desirable interest rate or qualify for a higher loan amount.
- Determine your exact monthly payment (including PITI: principal, interest, taxes and insurance) so you can budget accordingly.
- Calculate your down payment and closing costs.
To Become Pre-Approved, You Will Need To Provide A Licensed Mortgage Broker With The Following Information:
- Your social security number (to access your credit history).
- Your employment and income history (including recent pay stubs).
- A detailed account of your monthly debts.
- The amount and source of cash available for the down payment and closing costs.
Please remember that having a pre-qualification is not the same as being pre-approved. Pre-qualification is an estimate of how much you can afford and the figure is not guaranteed. Pre-qualification is a good step to take in the home buying process because it can narrow down the homes you look at, but ultimately, it does not take into consideration your entire financial picture. On the other hand, a pre-approval is a more thorough and official look at your finances. Don't assume that because you pre-qualify for a certain amount, you will be pre-approved for the same figure.
If you are interested in advice regarding your options for homeownership, pre-approval, credit coaching, or anything real estate and/or mortgage related, I offer complementary consultations and free information to help you make a wise decision for your financial future. As a Mortgage Planner, I work one-on-one with each individual to define a viable plan of action for their immediate and long term financial benefit. By treating each client as though they are my only one, I am able to focus on what truly matters – establishing personal connections and devising sound monetary solutions for them.
Please Contact Tim Weber with Home Lending Solutions via phone (303-205-7878) or e-mail (tim@teamhls.com) and feel free to visit Home Lending Solutions’ website at www.teamhls.com.