| Buying A Home - How Important Is Your Loan Prequalification? | | Print | |
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If you've been through the home buying process already, you're familiar with the age old advice to seek out a prequalification with a lender to know how much home you can afford. It seems like most sellers won't give you the time of day unless you can show proof you're a serious homebuyer. The reality is how much home you can qualify for depends on you.
If you've been through the home buying process already, you're familiar with the age old advice to seek out a prequalification with a lender to know how much home you can afford. It seems like most sellers won't give you the time of day unless you can show proof you're a serious homebuyer. The reality is how much home you can qualify for depends on you. There are many factors that influence the price of home you can qualify for. Can you net more income by adding a second job? Can you slash expenditures that aren't a priority? Had you decided what financing option you want to utilize? Are you a first time home buyer? Will the developer assist you with financing the deal? Is your family or friends willing to assist you will by lending money? Can a portion of the property be rented out for additional income? There can be a myriad of factors that influence your prequalification. How you answer these questions determine the amount of home loan you can qualify for. As you inspect homes for sale, it's a good idea to console with a reputable loan agent or real estate agent trained in assembling these types of transactions. Beware of prequalifications produced by generic fill-in-the-blank forms on a computer. By arranging an appropriate lender and seller, you could qualify for a better home. Obtaining a prequalification with one solitary mortgage company only offers you a limited view of all the possible financing options available to you. A particular lenders prequalification letter only tells you one financial option when you work with them. It won't inform you about the many other financial alternatives open to you. The best way to explore all possible financial avenues is to take advantage of every opportunity to negotiate a winning combination of lender and seller. When you are prequalified with a bank, it shows how much you can borrow based on information you supplied. The prequalified letter won't guarantee the bank will actually make you the loan. If you want a better way to determine if you can qualify for a home loan, you want to apply for a pre-approval. By being pre-approved, you can approach a prospective Realtor or seller with confidence and negotiate a better deal than another homebuyer who isn't pre-approved. You can even secure a loan pre-approval before you begin searching homes for sale. However, like a prequalification, there are several factors that can affect your borrowing limit such as the type of lender, mortgage programs, interest rates, and your credit history. Be aware a particular pre-approval only provides you with a limited snapshot of your borrowing capabilities. Also a pre-approval does not guarantee you'll actually get the loan. The lender must check out all of your information and verify you and the property fulfill other guidelines. About the Author: Looking to find the best deal on a starter home? Then check out these Anaheim homes for sale and use a local Anaheim Realtors to help you find one. |