Getting Preapproved
For a Loan
For
a first
time home buyer, you are taking on a monumental task, undoubtedly
the largest task you will ever venture upon, financially speaking that
is.
Unfortunately,
most of us don’t have huge sums of money sitting around in our bank
accounts to go out and pay for a house in cash. We must find a lending
institution that will allow for us to borrow the money.
The
fun part of buying a home is going out to look at various houses for sale,
and walking through what could very well be your dream home. But before
you spend all of your time visiting open houses and walking through homes
for sale, you will want to figure out how
much you can afford.
The
last thing you want happening to you, is finding your dream home, making
a bid, having your bid accepted
by the seller,
than finding out a week later that you will not be purchasing the home
because you don’t have the income
to back it up.
To
avoid this heart breaker, you will want to acquire a preapproval
from a lending institution.
The
preapproval process involves an in depth look at your financial situation.
The lender will examine your credit,
verify your employment and annual salary, take a close look at your outstanding
debt as well as your assets,
and determine what money if any you have available for a down
payment.
The
preapproval process could take as long as a week, but it is time well
spent. Once you are armed with a preapproval, you will know exactly how
much you can spend.
The
preapproval is also very powerful because the seller of the home wants
to be sure that you have the financial backing to purchase their home
if they decide to sell it you.
The
preapproval is not to be confused with the pre
qualification. The pre qualification is determined by a quick conversation
with a loan
officer who determines your spending power from a verbal standpoint.
You are asked a series of questions about employment, outstanding debt,
credit, assets, etc. Once this information is taken, the process pretty
much stops right there. What the lender believes you can afford is merely
an estimate on their part, no verification of is done on the information
you provided them with.
Be
careful, this estimate could come back to haunt you if it was over estimated,
so take the time and get a preapproval.
When
purchasing a home, allow for time to be on your side. Take your time and
find the right lender and realtor
(tm) for you. And most of all, take your time, so that you may find the
perfect home for you.
Debt
To Income Ratio
Home
Appraisal
Doing
Your Mortgage Homework
Don't
Let Bad Credit Stop You
First
Time Home Buying
Buying
a Home with No Money Down
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