Why Get Pre-Approved?
- You will know in advance what your payments will be on offers you choose to make.
- You won’t waste time considering homes you cannot afford.
- A seller may choose to make concessions if they know that your financing is secured.
- You can select the best loan package without being under pressure.
How Much Home Can you Afford?
Most lenders require that your monthly payment range between 25-28% of your gross monthly income. Your mortgage payment to the lender includes the following items:
- The principal on the loan (P)
- The interest on the loan (I)
- Property taxes (T),
- The homeowner’s insurance (I).
The Ten Commandments When Applying for a Real Estate Loan:
- Thou shalt not change jobs, become self-employed or quit your job.
- Thou shalt not buy a car, truck or van (or you may be living in it)!
- Thou shalt not use charge cards excessively or let your accounts fall behind.
- Thou shalt not spend money you have set aside for closing.
- Thou shalt not omit debts or liabilities from your loan application.
- Thou shalt not buy furniture.
- Thou shalt not originate any inquiries into your credit.
- Thou shalt not make large deposits without first checking with your loan officer.
- Thou shalt not change bank accounts.
- Thou shalt not co-sign a loan for anyone.