Everything Real Estate
Buyer Advice, Uncategorized

Are you Prequalified and Preapproved?

November 18, 2009 by · Leave a Comment 

blue-bulbAs I am sure you know these are very competitive times. Multiple offers are being submitted for many properties, and sellers are requesting pre-qualification letters from lenders. So I just wanted to let you know that the pre-qualification process is painless, but very important.

The lender will need the following information to complete the process:

1. Income for the last two years
2. Present installment debt
3. Present revolving debt
4. Estimated down payment
5. Present housing payment or rent

Then the lender will estimate the housing payment using current interest rates, and compute the applicable price range.

Even though getting pre-qualified is very important, every home buyer’s circumstances are different. So many times the better solution is getting pre-approved. A preapproval is your lender’s written agreement to finance your home purchase up to a specific amount, and can be very beneficial when purchasing a new home by strengthening your offer in two ways:

First: you are letting the seller know that you are serious. You have submitted a loan application and the necessary documentation to the lender and the info provided has been reviewed.

Second: you can shop for a home with the confidence of knowing exactly how much you can borrow, and find out about possible qualification problems early in the homebuying process.

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