Getting Pre-approved
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 for you. And most of all, take your time, so
that you may find the perfect home for you.
About the author:
Jennifer Hershey has more than twenty years of
experience in the Mortgage Industry as a loan officer.
She is the owner of
http://www.ExplainingMortgages.com- a mortgage
resource site devoted to making mortgage terms and
products easy to understand |
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