As you've already read here, conditions are ripe to become a homeowner, and it's time to determine if you’re ready to make the leap. While the price of the home is the largest factor, don't forget about loan fees and closing costs, which add to your total financed amount.
Since banks are stricter in their lending, Step One is to polish up your credit report. A higher score gives you more power when it comes to negotiating terms and interest rates.
Similarly, a larger downpayment will positively affect your mortgage terms and reduce the amount you have to finance. If you can't manage 20% down, you will likely have to pay a monthly mortgage insurance premium.
Upon preapproval from a lender, you’ll know how much loan you qualify for, and how much is required for the downpayment. It's best to secure preapproval before you begin looking at homes, especially since sellers will see your offer as a solid one worthy of consideration.
In addition to newer fees being assessed on loans to less than stellar applicants, there are standard closing costs associated with the purchase, including appraisals, legal fees, credit reports and more. All are included up front on your settlement statement and some may be negotiable. Contact an agent today to get the ball rolling and find out how much home you can afford.
Showing posts with label preapproval. Show all posts
Showing posts with label preapproval. Show all posts
11/6/09
Times Have Changed
Now that we've experienced the fallout from the subprime lending disaster, there is no longer such a thing as "easy money." Now you need perhaps ten to fifteen percent down, an excellent credit record and verifiable proof of income when you apply for financing.
One reason for all this scrutiny is that many lenders sell their loans on the secondary mortgage market, and they are using required (and automated) software to factor in all the variables in the equation that results in a thumbs up or a thumbs down. In other words, it's not quite as personal as it used to be.
Save yourself time, stress and heartbreak by seeking preapproval for financing before you even look at House One. I say "preapproval," and not "prequalification," because prequalification is only an "estimate" of the loan amount for which you might qualify once your application has been fully reviewed.
Preapproval puts you in the driver's seat with sellers, because it means that you have already basically "applied" for financing with your credit report, verified income, and proven ability to make a respectable down payment. Preapproval goes several steps beyond prequalification, and gives you the best indication of how much home you can afford.
Maximize the time spent on your home search by taking the all-important step of seeking financing first. Then make your offer with confidence!
One reason for all this scrutiny is that many lenders sell their loans on the secondary mortgage market, and they are using required (and automated) software to factor in all the variables in the equation that results in a thumbs up or a thumbs down. In other words, it's not quite as personal as it used to be.
Save yourself time, stress and heartbreak by seeking preapproval for financing before you even look at House One. I say "preapproval," and not "prequalification," because prequalification is only an "estimate" of the loan amount for which you might qualify once your application has been fully reviewed.
Preapproval puts you in the driver's seat with sellers, because it means that you have already basically "applied" for financing with your credit report, verified income, and proven ability to make a respectable down payment. Preapproval goes several steps beyond prequalification, and gives you the best indication of how much home you can afford.
Maximize the time spent on your home search by taking the all-important step of seeking financing first. Then make your offer with confidence!
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