Are You Pre-Approved For a Loan?

Whether you are a first time home buyer or you  have bought and sold numerous times, if you are getting a loan, you need to be pre-approved before you look for homes.

This is different than a simple qualification online through a mortgage calculator. A mortgage calculator, although useful, simply tells you home much mortgage a month your income can support. This doesn't take into consideration your debt or liabilities or other assests that go along with owning a home.

PRE-APPROVAL

You will need to sit down with a mortgage lender and have them go over your finances thoroughly to determine how much you can comfortably afford in a home.

 Who you choose to handle your loan is completely up to you and it's a good idea to shop around for a loan. Mortgage brokers tend to be higher priced but also can research thousands of loans from hundreds of banks to find the right one to fit your situation. A bank or credit union will tend to have lower fees but then you are locked into their specific loan through their bank. Be sure and weigh all the costs involved before deciding on a lender. (Visit our newest contact in Clarksville TN real estate for more on financing real estate)

 Once you have chosen a lender that you feel comfortable with and will do everything they can to get you a low rate and decent fees then you will be issued a pre-approval letter. This is the letter you submit to sellers when presenting an offer. You will want to be in close contact with your lender and have them not always state a specific amount on the letter.

• For example: Say you are pre-approved for a loan up to $300,000. You find a home that has been on the market a while at $250,000. You want to offer less so you put in an offer at $230,000. If you hand the seller the letter stating you are approved up to $300,000 then the seller will know you can afford more and may not accept your offer but hold out for more from you.  If you ask your lender to either state on the letter you are approved for $230,000 or simply state you are pre-approved in general then you are not showing all your cards to the seller and it keeps you the buyer, in a good negotiating position.

  If you think you are ready to start the process of pre-approval and begin looking at homes or property in the Las Cruces real estate area, let us know by filling out this form. We will be happy to help you whereever you are in the process. (Check out our Pullman WA real estate affiliate for more on pre-approvals)