Buying A Home – Prequalification Myths Exposed
Iif you already have some home buying experience under your belt, you’re probably familiar with the process of prequalifying with a bank to determine how much house you can afford to buy. If you’re already prequalified with a lender, sellers will give your offer more serious consideration because they know you won’t have problems satisfying the loan contingency. The fact of the matter is, the price of home you can afford to buy depends heavily on you.
The amount of loan you can qualify for depends on several variables. Can you boost your income each month? Can you rearrange your budget to cut out optional expenses? What method of financing are you considering? Will you be approved for a first time home buyer plan? Does the new home builder offer some sort a special financing? Are you planning to seek the help of family and friends to fund your deal? Can you rent out a portion of the property for additional income. These are just a few of the many factors affecting what you can afford.
Your answers to these questions affect the amount of home you can afford. As you check property listings, try contacting a local Realtor or mortgage representative with expertise in complicated deals. Avoid relying on automated prequalifications or ones based on generic fill-in-the blank questionnaires. What kind of home you can qualify for depends greatly on the combination of bank and seller you’re working with.
Prequalifying with the particular bank only gives a ballpark estimate of how much home you can afford when you use their financing. It can’t reveal all the alternative financing options available to you. You can determine what your possibilities are only by spending time researching and negotiating all the available options.
The prequalification letter you receive from a mortgage lender gives you an estimate of what you can borrow based on the data you supplied to the bank. It’s important to know this letter does not guarantee the lender will make you a loan.
Only a pre-approval will show a banks’ willingness to loan you the money. Most lenders will pre-approve you for a certain limit-even if you haven’t started looking. One main advantage of having a pre-approval letter is real estate agents and sellers will take you more seriously because they’ll know you can satisfy a loan contingency.
While a pre-approval provides a more secure way to buy a property, your borrowing abilities are contingent on several factors such as the mortgage lender you use, the loan program you choose, what interest rate you pay, and your FICO score. A pre-approval helps you narrow down the available options of borrowing money for your purchase. Be aware a pre-approval can be revoked if the lender can’t satisfactorily verify your information and if the property doesn’t fit its qualifying criteria.
Looking for the best Orange County home? Then check out these Anaheim Hills homes for sale and use a local Anaheim Hills Realtors .
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