KNOW THE DIFFERENCE! Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is preapproved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home. Be honest with the lender and yourself. You don't want to borrow more than you can afford. Your lender can provide a calculator to determine if you can afford to borrow and if so, how much. You can also use the Mortgage Calculator on this website to give you an idea. Look at the basics of the loan. Don't get distracted by all the bells and whistles. Choose the type of loan that makes the most sense to you. Know your credit situation. Obtain a copy of your credit report and FICO score a least 6 months before you apply for a mortgage. This should give you enough time to challenge and remove any errors on your credit report and take care of anything that 's hurting your credit score. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance and taxes. You should also consider repairs and maintenance costs as well. As a homeowner, you are responsible for those additional costs. Organize your finances before you go to the lender. While each lender may require different documentation, at a minimum you will need: Pay stubs, Tax returns, Financial statements (one that is less than 60 days old), Copies of additional monthly payments such as car loans, credit cards, student loans etc, Any additional information (such as proof of additional income) that you think will help your lender to positively evaluate your credit request.
|