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Ready to buy a home? Have you been pre-approved for a loan?

Are you ready to buy a home? Have you been pre-approved?

 We are now in a seller's market which makes the home buying process very competitive. Multiple offers on properties are becoming more common so it's crucial for buyers to be prepared. Any small advantage, may make the difference between being accepted or denied.

 If you plan on financing your property it is important to get pre-approved for a loan. There is a difference between pre-qualification and pre-approval. A pre-qualification can be done by phone and most, if not all, the information provided is verbal. A Pre-qualification is based on what you disclose to the lender about your earnings, credit score and assets. A pre-qualification gives you a simple idea of the range of price you might be able to afford. This carries no weight for a seller.

 A pre-approval requires a borrower to provide documentation of their income and assets. The lender will also run a credit report and score. The bank will require tax documentation, pay stubs, bank statements, 401K statement, among other documents.

 The lender will review all this information and provide you with a more accurate price range. That said, there is no 100% guarantee that the bank will lend you the funds but this is the closest you will get before you find a property you would like to purchase. 

A pre-approval is very important with home shopping. Strive to get your pre-approval letter 30-90 days before your target move date. Most letters will expire within 90 days.

 There are many other advantages such as the ones listed below:
  1. A pre-approval will carry more weight with sellers. A pre-approval letter tells them that your lender has reviewed your financials and you are eligible for a home loan in their price range. Your lender will provide you with a pre-approval letter that will be submitted along with your offer.
  2. Lender will provide you with a good faith estimate that will give you an estimate of down payment, closing costs and mortgage payment. This will allow you to make a more informed decision when home shopping. 
  3. You will know in advance the amount you can confidently afford/offer when you find the right home. There is no guess work.
  4. The process will inform you of any credit issues that might need to be resolved before you official apply for a loan. Your lender can make some recommendations that might help you better your loan options.
  5. You will have the opportunity to review loan options with your mortgage lender. The most common option is a 30 year fixed interest rate loan but that is not always the best options for all buyers. For those buyers that will be in a home for less than 5 years, there are other options that might make more sense.
  6. Being pre-approved will speed up the mortgage process and can lead to a shorter closing period.
It's never too early to speak to your mortgage lender. Give yourself time to consult with your lender and make corrections if needed. You can schedule a meeting for a mortgage lender to simply review your financial goals and strategies to buy a home.

Remember, just because your bank pre-approves you for a certain amount, that does not mean that you have to borrow that balance. Review your finances and figure out what is best for you. Give yourself some wiggle room so that you have funds for the fun things in life. 

If you need a mortgage lender referral or if you have any other questions, please feel free to contact me anytime.


If you have any questions or if you would like assistance in buying, selling or renting give me a call. I'm happy to help.



Ali Palacios, ABR, MCNE, TAHS
Realtor
Today's Home Realty
ali.palacios@todayshomerealty.com
Mobile - 832-418-0670
Fax - 832-201-7492
www.todayshomerealty.com
www.ilovehappyclients.com

9119 Hwy 6 S #230-116, Missouri City, TX 77459


Home buyers and sellers beware: http://homes-sale-richmond-texas.blogspot.com/2016/02/home-buyers-and-seller-beware-wire.html
Rental fraud alert: http://homes-sale-richmond-texas.blogspot.com/2016/02/rental-fraud-alert-texas-luz-astacio.html



About me: http://www.ilovehappyclients.com
Professional Memberships:

  • Houston Association of Realtors®
  • Texas Association of Realtors®
  • National Association of Realtors®
  • Accredited Buyer’s Representative – ABR
  • Master Certified Negotiation Expert – MCNE
  • Accredited Staging Professional – ASP®
  • Texas Affordable Housing Specialist – TAHS
  • Women’s Council of Realtors®
  • National Association of Gay & Lesbian Real Estate


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