First Time Homebuyer - Pre Qualify Before You Buy

First Time Homebuyer Information & Education

Pre Qualify Before You Buy

Pre Qualify Before You Buy - A pre-qualification allows you to get an idea of your borrowing potential before beginning your home search. Pre-qualification is usually free and the buyers ability to purchase a home can be confirmed fairly quickly. This step alone will increase the buyers leverage position with both Realtors and sellers.

The Pre-Qualification process with a mortgage professional also helps the buyer structure the offer on the property. At the suggestion of some experienced mortgage brokers, many home buyers are able to purchase their target properties with less money down by asking the sellers for a concession instead of haggling for a lower price.

In order to be Pre-Qualified you will need to provide your Mortgage Broker with income and asset documentation along with authorization to run a credit report.

By pre-qualifying yourself you're showing the seller both that you're serious about purchasing a home and also that the process with you may be quick and relatively painless. There are sellers that have taken a lower price, simply because it was apparent that pre-qualified borrowers would be an easier sale.

Pre-qualifying before buying a home is not the same as being pre-approved. Pre-qualifying just means that, based on the information you provided, there is a good chance that you will be approved for a mortgage. Becoming pre-approved means that the lender has verified all your credit and income information granting you approval in lieu of you finding an acceptable property to purchase.

Ask your real estate professional if a pre-approval will enable to you carry more buying power.

There is nothing more horrible than finding the home of your dreams only to find out that skeletons hiding in your credit report are preventing you from qualifying for a mortgage.

Getting pre-qualified for your loan prior to shopping for a home is a wise financial decision because you can determine both conservative and aggressive estimates of your maximum purchase price. Many people who choose a home prior to consulting a mortgage professional find themselves emotionally attached to a house they can't really afford. Of course the home buying process is emotional but you shouldn't let feelings dictate your family’s most important investment: your home.

Call me at 440-614-0130 or email me at dave@gofirstsecurity.com to get pre-qualified today!

Preparing to Buy a home - There are many things that should be done when preparing to buy a home. The first thing to do is to consult a mortgage professional. You will be able to find out how much of a home you can afford to buy, a down payment will be required or you will be able to qualify for a zero down mortgage, and how much your monthly mortgage payments will be based on your pre-approved loan amount. You should do this before meeting with a Realtor to start looking at homes so that you know what exactly you can afford.

Discuss your specific situation with your mortgage professional to find the best program and rate for you. Ask if there is anything you can do to improve the rate. Sometimes you can get a better interest rate if you can fully document your income and assets, or if you pay off some small debts, or if you put a little more money down.

When preparing to buy a home you will not want to make any changes to your financial profile. Avoid making any large purchases, such as a new car, or furniture for the new home. Do not transfer funds between accounts. Do not take a new job, or suddenly retire. Such significant changes can impact your ability to qualify for a new home. Be sure to check with your mortgage consultant before you do anything that might raise a red flag to the lender.

Purchase a copy of your credit report. Scrutinize it thoroughly to find any incorrect information that may have a negative impact on your credit profile. If there is any entry that are not update or simply false, write to all three credit bureaus to request that they remove or update the inaccurate items. Examining the credit report should be done before the actual mortgage application process because correcting false entries can take months.

Next, decide on the area in which you want to live. Your individual priorities will ultimately be the highest influence in your decision-making process. Ask yourself questions based on your greatest needs. Those needs will also steer you towards areas of your community where you may want to live. The next step would be determining if you can afford the average home in that area.

If you are applying for a mortgage its important to make sure no changes are made to your credit. One easy way to know if a particular purchase will affect your credit is if a retailer asks for your social security number. Tell the clerk that you are in the process of buying a home and you will not provide that information at this time.

In addition to making sure that no changes are made to your credit, you will also want to make sure that no changes are made to your employment. Do not quit your job or reduce your hours until after you have made your home purchase.

Also, if you have been saving for a down payment, make sure that you leave those funds in the bank account that they have been accumulating in. The lender may want to verify that they have been there for at least two months. This is called seasoning.

When you are ready for a mortgage pre-approval, contact me at 440-614-0130 or dave@gofirstsecurity.com.

In addition to reducing your hours or quitting also don't go on maternity leave.

Another important issue after purchasing a home is the security and safety of the home and your family. This issue can be solved by insuring the home. Many companies are offering cheap home insurance on very easy terms. However this must be done with caution as many companies offer cheap insurance but there are many hidden costs in those offers. You can take help of a broker as well. Companies like National brokers insurance services provide help in such cases. Secure the health of your family as well by getting insurance from health insurance companies.

Information listed above is to be used for educational purposes only and is not guaranteed

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