The Advantage of Loan Pre-Qualification
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The Advantages |
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Know how much house you can afford. |
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Know how much cash you will need for the down payment. |
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Simplifies pre-approval. | | |
Finding a desireable house and then hoping that a bank will lend enough money to buy it is the backwards approach to buying a house.
The correct process is the reverse of this.
Buyers are urged to obtain pre-qualification letters from reputable lenders doing business in their areas before starting intense searchs for houses. This approach saves valuable time and might even save heartbreaks should buyers fall in love with houses they cannot buy.
Lenders considers these items when pre-qualifying for mortgage loans:
- Employment History
- Credit History and Scores
- Monthly Income and Expenses
A buyer's price range is determined as follows:
$XXX,XXX = The loan amount the buyer can borrow
PLUS $XXX,XXX = The cash a buyer has for down payment and closing
Equals $XXX,XXX = The price house for which the buyer is qualified.
Pre-qualification does more than direct buyers to their correct price ranges. It is assurance to sellers that buyers are financially able to obtain mortgages to complete the transactions. It makes the buyers' offers much stronger and more desirable to sellers.
Lenders can help buyers work out bad credit, debt consolidation, and other problems that hurt their ability to borrow. When these issues are resolved and pre-qualification letters are issued, buyers are able to sail forth into the real estate market with the realization that financing will not hold them back from purchasing homes.
We, at Hillstrom Real Estate, can help buyers make preliminary estimates of their borrowing ability. But our estimates are never as accurate as lenders' estimates because lenders are the experts in this field, and they have broad ranges of loan programs available that have differing quailfication requirements. We ask all our buyers to let us help them obtain a pre-qualification lender at the start of searching for homes.
Call or email us for a list of some of the excellent loan officers and mortgage companies in the metropolitan Maryland/Washington D.C./Virginia area.
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