Thursday, March 11, 2010 - Article by: FHASUBMISSION.COM - ESSEX MORTGAGE BANK -
Getting a Pre-Approval for a loan is helpful for many reasons.Please let me describe the top two reasons I feel everyone should make this their first step in the homebuying process.
1. - To make sure that you actually qualify for a loan sitting down and submitting your financial information with a F.H.A Approved lender is critical during that process your lender will look at your income,credit scores,cash reserves for the down payment if applicable and assets in the bank.After collecting this information we will then be able to compute your debt to income ratios and find out exactly what kind of payment you can qualify for - after all the debt to income ratio's are the most important part of qualifying for a F.H.A loan.
.2 - Check your credit score to see how it will effect your payment and interest rate.If you have less then perfect credit you may want to work with your lender and a "Rapid Rescore " agent to get those issues resolved after all a lower credit score will mean a higher mortgage payment.By correcting something as small as a 30 day late two years ago can save you hundreds on your mortgage payment.
The savvy home buyer is the one who shops around for the home loan finance before shopping
around for a property to buy. That way, he or she knows exactly how much he or she can (or can
not) afford to pay when buying a home. The buyer can then confidently seek out, only properties,
within his or her pre-qualified home loan price range.
The only certain way of knowing how much you can borrow is to go through the home loan prequalification
process. Loan pre-qualification is not difficult, and if you are not a cash buyer, it is
an essential part of the whole home buying process.
Home loan pre-qualification starts the ball rolling and is the first step in formally applying for a
home loan. It lets the buyer know what is and is not possible.
Pre-qualifying for a home loan also puts the buyer in a much stronger negotiating position with
the seller. The fewer sales conditions included in the contract the better.
A loan pre-qualification can also help a real estate agent to better meet the needs of the buyer. A
real estate agent can waste a lot of time searching for properties that are out of the home buyers
By knowing what the financial boundaries are, a real estate agent can concentrate on finding
properties that fit within the home seekers budget. This will save the agent time, and it will save
the buyer time, by not having to inspect properties that he or she can not possibly afford to buy.
As I said earlier - The big advantage in pre-qualifying is that it puts the buyer in a much stronger
If the seller gets two similar offers to buy the property, the offer from a fully pre-qualified buyer
with most likely get preference over an offer with conditions attached. Most vendors are wary of
signing contracts subject to the buyer applying for home loan finance and getting the application
The seller might even accept a lower offer from a pre-qualified buyer, rather than take the chance
the other buyer might fail in obtaining the required loan financing.
There are two methods of applying for a pre approved loan. The standard way is to supply a
home loan agent with your financial and credit history. The loan agent will then 'crunch the
numbers' and 'run the ratios' to calculate the level of borrowing that can be approved. A major
flaw in this scenario is when the borrowers forget to reveal all. They (conveniently) forget to tell
about their three overdue credit card payments, their new car payment or they push their income
figures beyond reality.
The preferred method is to first complete an application and provide income and employment
records. The loan agent would then run a credit report and actually submit the file to a wholesale
lender for underwriting before receiving approval and commitment for loan finance.
The message is simple; get a pre-qualified first, then find your dream home. Remember, getting
the order right will save you money when negotiating the contract. Having a pre-qualified loan
also tells the seller you are serious and really can afford to buy the property. Pre-qualification is a
powerful negotiating tool when presenting an offer to purchase.For these reasons I ask that you please visit my website WWW.FHASUBMISSIONS.COM and spend the extra five minutes to fill out the loan pre-approval application.I can bet you at the end of the Home Buying Experience you will have been happy you did !!! Thank you for your time and I wish you the best in your house hunting venture.
Jeffrey Martino Young
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