BUYER'S GUIDE
Knowing What you can Afford
The first thing you need to decide is how much you can afford.
Determining this early in the buying process will save you a lot
of time and frustration. Not only will you have a clearer idea
of the amount you can spend, but you can also eliminate all
those homes that are not in your range. You may even find that
being pre-approved opens the doors to a home you hadn't
considered before.
7 Steps To Home Financing
- Credit Report - Contact a credit bureau and get a credit report on yourself, just to make sure your report is accurate. If you don't like what you see, it's time to try to clean up any problem items or clear up any mistakes. You may also want to consider contacting a consumer credit counselor for help.
- Save Money - Skip a vacation, movie or dinner out to save money for a down payment and closing costs. Try not to buy anything on credit and if you do, pay it off quickly. Try to avoid taking on another large credit expense or even applying for another credit card.
- Get Pre-Approved for a Mortgage - - It pays to get pre-approved for a mortgage early in the process. Some think pre-qualifying for a loan is enough, but it's not. Pre-approval gives you more power when you've found that perfect house.
- Buying Power. Lets you know in advance how much you can afford to spend on a home.
- More Control. You have the negotiating power of a "cash" buyer when you can prove that you have financing in place.
- Faster Closing. You can close in as little as 15 days compared to the average 60 days for those that are not yet approved.
- Saves Money. You can lock in an interest rate early for a faster closing and better rate. (Ask your lender about a 30-day rate lock instead of the normal 60 days.)
What's the difference between Pre-Qualification and Pre-Approval?
Pre-Qualification is a "guesstimate" of what a buyer might qualify for prior to actually submitting a mortgage application. Based on the unverified financial information you provide, the lender uses a quick calculation to arrive at a loan amount. Pre-Approval means that the lender has verified your financial information and has actually committed money in your name for a specific loan type and amount. With today's technology, you can receive loan pre-approval in minutes.
Proceed to the next section of the Buyer's Guide - Getting a Loan
