Millions of Americans will be searching for a new home and will be taking advantage of current
low interest rates. Before consumers go home shopping, there are some preliminary steps to save time, money, and wasted effort.
Pre-Qualify:
If you are a first time buyer, consider getting yourself pre-qualified first by a reputable mortgage bank. They can provide
counseling on the many types of loans tailored to your financial situation. By pre-qualifying for a mortgage, you will be aware of how
much house you can afford before you start shopping. There is no fee for the financial consultation. However, there is a
small charge to cover the cost of the customer's credit report. The mortgage company will advise you as to what documents they need
for you to bring for consultation, such as:
Copy of your most recent pay stubs (two months)
Self-employed should have last two years' tax returns.
Documentation of outstanding debts
Checking and savings account balances
Proof of monthly income for the past three years
Determine the Best Type of Loan for Your Needs:
The mortgage lender will help explain the difference between the adjustable or fixed-rate mortgage so you can determine what is the
best type of loan for you. The period of time you can expect to live in the house will be a major factor in deciding the type of loan
you are looking for. They will give you the amount of down payment required, amount of closing costs, and the amount of your monthly
payment for each type of loan. For a sample of some of the interest rates available on fixed-rate loans, click
here.
The Advantage:
The advantage of a pre-qualification is knowing how much house you can afford, and once you have found it, you are ready to contact
your real estate salesperson and start looking for your dream home. When you find the home you want to purchase, you are ready to make
your offer knowing that the home is in your price range. Advance credit approval will also help you negotiate a better deal
with the seller. After you have made an agreement to purchase and have your accepted contract in hand, you are ready to make your
application to the lender.
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