The first step to buying a home should be getting preapproved for a mortgage. This is arguably the most important step for a few different reasons:
First and foremost it allows you to find out how much you can qualify for. Notice the wording. I didn't say how much you can afford, I said "how much you can qualify for". It's important to understand the difference between what you can qualify for and what you can afford. Borrowing guidelines determine how much someone can qualify for when applying for a mortgage and what you can afford is determined by completing a household budget and deciding how much you can afford comfortably. Sometimes the two are not that same. Remember, just because you can get approved for a higher mortgage doesn't mean you should!
By getting pre-approved for a mortgage you are able to know, up front, whether you qualify for a mortgage or not. This means that you aren't going to waste your time or your Realtor's time by looking at houses when you can't get approved. Too often people look at dozens of houses without getting pre-approved. Unfortunately, that ends up wasting their time and their Realtor's time. As a matter of fact, most Reator's today want to know that a client is pre-approved prior to showing them the first home.
By getting pre-approved for a mortgage you are able to guarantee your mortgage interest rate for a set period of time. This length of time can vary from one lender to another ranging anywhere from 30 days up to a full year. The nice part is that when you guarantee your mortgage rate it means that if the interest rates go up within the guaranteed period that your interest rate is protected. If the closing date falls within the guarantee period then you will get your guaranteed rate (even if mortgage rates have gone up). There are even certain lenders that will automatically give you the lower rate if mortgage rates go down further.
Many people think that a pre-approval is a pre-approval is a pre-approval. Confusing huh? Well, it's important to note that not all pre-approvals are the same, they vary from lender to lender. The conditions of the pre-approval change, the policies change around rate guarantees too. Most importantly getting a pre-approval from a local bank branch can be devastating.
Banks and lenders are businesses. The bank representatives job is to get you to complete an application and to try and stop you from shopping around. As a result when the bank pre-approves someone THEY ARE NOT APPROVING YOU! They are just saying "based on the information you told us, we'll approve you for $XXX,XXX at a rate of X.XX%." They're quick to say you're pre-approved.
I can't tell you the number of times every year that I get clients coming to me that their bank has pre-approved them and when push came to shove they didn't want to give them the mortgage.
By dealing with me, I'm able to review your entire situation. While the pre-approvals are still only rate holds based on the information provided, I have the expertise to help guide you and advise if your documentation is sufficent or if the bank can or can't include your income. I know the policies and I know the banks!
Let me handle your pre-approval and you will get courtious and professional service that you can count on, from beginning to end.
Call today toll free 1-866-257-0158 and get pre-approved! I can usually get a pre-approval done within 24 to 48 hours.