So – you've completed an initial mortgage pre-qualification and now you're ready to take the next step and meet with your lender or mortgage advisor for the pre-approval interview. Are you ready? At this stage of the application process your lender will dig into your financial background to ensure that you're fully capable of making your mortgage payments and that you don't present too high a risk. Let's take a quick look at a few questions you should know the answers to before you go in for a mortgage pre-approval whether you are a first time home buyer or a seasoned buyer and seller.
Do You Have a Specific Home in Mind or just starting to look?
If you've already picked out the perfect new home, be sure to bring along some of the details when you meet with your lender. At minimum you'll want to know the price range that you're expecting to buy in, so that your mortgage adviser can try to find a mortgage that allows you to purchase the home and still meet your other financial goals. You might have already looked at some homes for sale and not sure if you can afford them and are asking yourself, how much house can I afford. Your wise first step would be to get pre-approved whether you have a home in mind or just seeing how much you can afford before you start looking. It is very important to get pre-approved first, so when you find that perfect home you will have the pre-approval letter to accompany that offer, to strengthen your buying position.
What is Your Current Income from All Sources?
Your income (and that of your spouse, if you have one) will be a major factor in the size of your mortgage, your payment terms and the interest rate that you qualify for. If you have a significant income and it's clear that you will have little trouble making the mortgage payments you'll likely qualify for a shortened amortization period that includes a lower interest rate. Conversely, if you can only afford to make a bare minimum monthly payment you'll be facing a longer mortgage term. There are so many different types of loans and the loan adviser with be determining what loan options you have based on your answers. Each loan that is available has a certain criteria and it is the loan advisors job to ask you the questions to see where the best fit is or if you have several options.
Do You Have Any "Black Marks" on Your Credit?
If you have any negative spots in your credit history you'll want to ensure that you're able to answer for them, because your lender will certainly ask about them. Be honest and confident, and remember that the lender wants your business as much as you want to receive a pre-approval for mortgage financing. If you hit a stumbling block here, your lender will be able to help you clear the issue or issues up or guide you in the right direction. The lender will have to run your credit in order to get your credit score which effects the loan type and interest rate also besides your income. If you are thinking about purchasing a home this year and would like to talk to a lender to check out your options, just give me a call. I will connect you up with a lender, free of charge to check out your options.
What Are Your Plans in the Next Five to Ten Years?
Finally don't forget that interest rates will continue to fluctuate and that may have an impact on your mortgage in the near future. Be sure to share any major financial plans that you have with your mortgage lender, as they can keep you appraised of any refinancing opportunities that come about.
Buying a home is an exciting time – one that will be far less stressful if you are fully prepared for the many steps along the way. Don't forget, your Realtor will be your BEST advisor and help you every step of the way from thinking of buying to the actual closing and movers to use. If you find yourself kicking the tires to see if there may be a home you might like. You can go to my website, soldbyk.com, which is connected to the Realtors Multiple Listing Service and search every property on the market for sale, up to the latest listed in the last 24 hours. If you find any you might want to check out, just give me a call and I would be happy to set up an appt. for you to check it out.
If you are thinking of selling, call me for a FREE home evaluation in your neighborhood, from staging, pricing, housing values, interest rates, how appraisers are valuing properties, now that the guidelines have changed. I would love to sit down and talk with you. Just call me and let me know how I can help with your real estate needs. Thanks!!! Karen
Notary, ABR, AHWD, CRS, e-Pro, GRI, SFR