THE FIRST STEP IN BUYING A HOME
PREQUALIFICATION VS. PREAPPROVAL
- Prequalifying for a mortgage generally helps you determine how much house you can afford and is strongly recommended.
- Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income.
- Becoming prequalified does not necessarily mean that you will be approved for a loan of that amount.
- Preapproval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount.
- Having preapproval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home.
- Most lenders require a 5 to 20 percent down payment; 25 percent or higher down payment may qualify you for a lower percentage rate on your loan.
- I can help you locate lenders who will assist you in finding a financing package that best meets your needs. Determining how much you can afford before you begin your home search will save both of us valuable time.
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Learn more about the buying process by clicking the links below: