January 23rd, 2017 5:07 AM by Jackie A. Graves, President
If your resolution is to get into a new home this year, it's
important to understand the mortgage pre-approval process.
looking to buy — especially in a competitive market — should ask a reputable
lender to pre–approve them for a mortgage. A mortgage pre–approval letter:
Confirms you can qualify for a mortgage;
Tells you how much you can expect to borrow, provided your
financial status doesn't change;
Makes you a stronger home shopper since sellers won't have to
worry about whether you can qualify for a mortgage.
During the pre–approval process you'll fill out the loan
application provided by your lender. The lender will review your credit,
financial and employment information. There may be an application fee.
What kind of information will your lender be looking for? For one
thing, they'll want to know you're a good credit risk — that you have a solid
history of paying your bills on time and the financial ability to make your
mortgage payments. They'll also want to know how much capital or cash reserves
you have available, and more information about the kind of place you'd like to
buy. So your lender will be looking at things like your W–2 statements, bank
statements, credit report and tax returns.
Although mortgage pre–approvals are usually good for only a
limited time (be sure to discuss this with your lender), they're worth getting.
The reason: Even though you'll still need to apply for a mortgage once you find
a house to buy, your pre–approval letter speeds up the process and helps clear
the way by telling home sellers you're a serious buyer.
pre–approval, you'll receive a conditional commitment in writing that outlines
the maximum amount you can borrow. Remember, it's a maximum, and not
necessarily the amount you should borrow. You'll want to stay within
your budget and within your comfort level.
Follow this series to get more information about getting
into a new home this new year and visit My Home by Freddie Mac where we discuss it all.
Freddie Mac - To view the original article click here