Mortgage Preapproval For Home Buying Success
6 Steps in Home Buying Process

Why should you insist on mortgage preapproval before buying a house? At first glance, there appears to be little difference between mortgage preapproval and mortgage prequalification.

If both address income, job history, credit, debt, down payment and calculate house payments, what's the harm in being prequalified?

Prequalification vs. Mortgage Preapproval

There is no set criteria determining the standards of prequalification. Often a short 5 minute talk over the phone, prequalifications are notoriously unreliable.

For a dependable answer, insist on nothing less than mortgage preapproval. If for no other reason, most sellers require certificates of mortgage pre approval.

What To Expect From Mortgage Preapproval

There are 6 basic areas addressed by mortgage preapproval...

1. Income: Mortgage companies look for consistent, dependable and ongoing income.

2. Employment: If you have worked at related jobs with no gaps during the last couple of years, employment likely will not be an issue.

3. Credit: Paying bills on time will get you further toward your goal of home ownership than anything else. Make a conscious decision to pay your bills on time today.

4. Debt: Are you buried in credit card debt? How about car, boat, jewelry, furniture, and student loans? These payments along with alimony and child support are considered in the preapproval process.

5. Savings: The amount required for down payment and mortgage closing costs vary between loan programs. If you don't have a savings plan, begin one by setting aside part of each pay check.

6. House Payment: In addition to calculating house payments, lenders generally add in a monthly portion of property taxes and homeowner's insurance.

Affording A Mortgage - Don't Depend On The Bank

Mortgage affordability is often overlooked by banks. But don't assume you should ignore it.

Ask yourself if affording a mortgage is going to be do-able once combined with related costs such as replacing a roof, furnace and water heater. Prepare a realistic budget whether or not the mortgage company asks for one.

After all, you are the one who will be responsible for the mortgage payments. So make sure you not only qualify for the payment but also can afford it.

Begin the mortgage preapproval process before you shop for a house. Understanding mortgage preapproval will increase your home buying success.

Prime Real Estate Articles Tip No.59
Home Mortgage Application | Acknowledgment and Agreement

This portion of the application is otherwise known as To Tell The Truth.

Read the fine print in Acknowledgment and Agreement before you sign and date the home mortgage application, although I agree it's a tad bit boring.

Understanding Mortgage Applications

Take the guided tour with Kate's unique tips for filling out your home mortgage application...

Coborrower | Responsibility | Loan Type | Appraisal | Rates/Terms | Address/Units | Legal Description | Year Built | Purpose | Usage | Construction | Refinance | Title 1 | Title 2 | Fee Simple | Down Payment | Name | SS Number | Phone Number | DOB/Education | Address | Employment | Income | Housing Expense | Assets | Liabilities | Real Estate Schedule | Transaction Details | Declarations | Acknowledgement | Government Monitoring | Application Interview

View FNMA 1003

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Roadmap At Prime Real Estate Articles

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