Getting Pre-approved For a Loan
For a first time home buyer, you are taking
on a monumental task, undoubtedly the largest task you will ever venture
upon, financially speaking that is.
Unfortunately, most of us don t have huge
sums of money sitting around in our bank accounts to go out and pay for
a house in cash. We must find a lending institution that will allow for
us to borrow the money.
The fun part of buying a home is going
out to look at various houses for sale, and walking through what could
very well be your dream home. But before you spend all of your time visiting
open houses and walking through homes for sale, you will want to figure
out how much you can afford.
The last thing you want happening to you,
is finding your dream home, making a bid, having your bid accepted by the
seller, than finding out a week later that you will not be purchasing the
home because you don t have the income to back it up.
To avoid this heart breaker, you will want
to acquire a preapproval from a lending institution.
The loan preapproval process involves
an in depth look at your financial situation. The lender will examine
your credit, verify your employment and annual salary, take a close look
at your outstanding debt as well as your assets, and determine what money
if any you have available for a down payment.
The loan preapproval process could take
as long as a week, but it is time well spent. Once you are armed with a
preapproval, you will know exactly how much you can spend.
The loan preapproval is also very powerful
because the seller of the home wants to be sure that you have the financial
backing to purchase their home if they decide to sell it you.
The loan preapproval is not to be
confused with the pre qualification. The pre qualification is determined
by a quick conversation with a loan officer who determines your spending
power from a verbal standpoint. You are asked a series of questions about
employment, outstanding debt, credit, assets, etc. Once this information
is taken, the process pretty much stops right there. What the lender believes
you can afford is merely an estimate on their part, no verification of
is done on the information you provided them with.
Be careful, this estimate could come back
to haunt you if it was over estimated, so take the time and get a preapproval.
When purchasing a home, allow for time
to be on your side. Take your time and find the right lender and realtor
for you. And most of all, take your time, so that you may find the perfect
home for you.
Author-Bio: Jennifer Hershey has more than
twenty years of experience in the Mortgage Industry as a loan officer.
She is the owner of http://www.ExplainingMortgages.com
- a mortgage resource site devoted to making mortgage terms and products
easy to understand. |
