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Return to Buying A Home
How much can you afford?
Determining how much you can afford before we actually start the process if locating your home, allows us to narrow the search. This permits us to focus on the right list and select those areas that may afford you stronger buying power on a larger home.
 We always want you to get pre-approved rather than pre-qualified. This strengthens our negotiations once we begin to write a contract. The seller views a pre-approved letter as good as "cash". It can mean the difference of success or failure on that offer for your dream home.
Because you go through the steps necessary to get pre-approved, you will have an added benefit of understanding the costs associated in purchasing your home. Not all costs are directly related to your mortgage. However, these costs will still affect your on hand cash reserves and how much will ultimately be applied towards the mortgage.
What is the difference between pre-qualified and pre-approval?
The real difference is the level of underwriting and documentation that is provided. The commitment level from the lender and their underwriting department are critical and are based upon the documentation you provide together with your credit history.
Click here to get pre-approved
Pre-qualified - you work with a mortgage specialist and fill out simple forms, provide documentation on how much you earn, how much you owe on a monthly basis, and also how much you can put down. All information is handled in strict confidence. The result is an estimate as to the highest price that you can afford together with any terms and condition. The more documentation and information you provide may qualify you for a larger loan amount.
Pre-approval – is similar to pre-qualifying, but much more in-depth. You will complete more documentation, and detailed research is done so that all issues are resolved prior to approval and your home loan becomes underwritten. Your lender handles all documentation and all information is strictly confidential. The result is as good as cash and provides the highest level of negotiation power second only to actual cash.
However, in both cases the final loan is dependant upon things remaining stable throughout the process "up to and including" the day of closing, so major purchases should be avoided and large cash transfers out of your bank accounts or other major asset changes will directly effect your final closing approval.
Have you contacted a mortgage lender?
If not, then contact me and we'll sit down together over a coffee at your convenience and discuss your situation, the type of home you would like, the area that you would like to live in (commute, facilities, etc.). From there, I'll provide you with the names of a few lenders that will best fit your circumstances.
I have lenders that can assist you, even with:
| good or bad credit |
no income verification |
full financing |
| 1st. time buyers |
construction loans |
etc....... |
For any mortgage, make sure that you (and not the lender) are comfortable with the monthly payments, loan amount, up-front fees, and the terms and conditions. The Good Faith Estimate and Mortgage Contract should clearly spell out the terms under which your loan was granted. Look at your budget and finances now (not in the future - your raise may be less than anticipated) and make sure it's affordable. Work with your lender, and if you find that the payments are more than you can handle - renegotiate for a better deal. Be prepared to share your financial details in an honest straightforward way. The more your lender knows about your budget, the more options he/she can explore to help you. Remember, the earlier you prepare for this, the sooner you'll be in your new home.
LAY the team's foundation
To move you into your dream home in the shortest possible time and at the right price, the team must be strong so we LAY the foundation. To LAY the team's foundation we need a good team structure, and that's why I emphasize "LAY". The structure will comprise
- L - Lender
- A - Agent (that's me).
- Y - You.
Having laid a good foundation, we will be ready to make that critical offer when you find your dream home.
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