(760) 822-7062 Rick@RickYells.com

Purchases

When buying a home, the MOST IMPORTANT STEP is to get a Pre Approval.

 

A Mortgage Pre Approval Shows What You Can Afford

It can be tempting to start searching for a new home by browsing listings and scoping out potential neighborhoods. But before you fall in love with a house, you should get pre approved first. A mortgage pre approval will help you estimate your monthly payment and understand what you can afford.

What’s is a pre-approval?

A pre-approval is a lender deciding that, based on the financial information you provide, you’re a good candidate for a mortgage. In the approval, you usually get an estimate of your loan amount, interest rate and what your monthly payment could be.

Why Getting Pre- Approved Is Important

Getting pre- approved first has a few advantages:

You and your real estate agent will understand what you can afford so you don’t waste time looking at homes outside your budget.

  • You’ll be in the best position to make a strong offer on a house because the seller will know a lender already verified your finances.
  • After your offer is accepted, you’re less likely to run into surprises that could slow down closing the loan.

 

Keep in mind a pre-approval is just the start of getting a mortgage. Once you find a house and make an offer, the house will need to pass inspections and be appraised by a third-party. Your approval amount could also change if your financial situation changes.

 

What Lenders Review

 

Mortgage lenders typically look at three criteria when deciding on how much you can borrow: your assets, your income and your credit.

 

Your Assets

 

Assets are items you own that could be turned into cash should the need arise. They include things like checking and savings accounts, stocks, real estate, personal property and more. Lenders review your assets to make sure you have some money set aside to make your mortgage payments after closing.

 

Your Income

 

Lenders review your income to ensure you can afford a monthly mortgage payment. They’ll also check your debt-to-income (DTI) ratio to make sure that the amount of debt you have doesn’t offset your income too much. Typically, a mortgage company will want to see you have a DTI below 50%.

 

Your Credit

 

Having good credit can help you qualify for a better interest rate because you’ve shown you’re a responsible borrower. Some mortgage lenders have minimum FICO® score requirements.

 

Will getting approved affect my credit score?

 

Getting approved for a mortgage involves pulling your credit report, and this can lower your score by a few points. However, if multiple lenders check your credit over a short period of time, the credit bureaus will count these inquiries as a single credit pull, and your score will only be lowered once.

 

Steps to Getting a Pre-Approval

 

You can give me a call or email me if you prefer.

 

The easiest way is to fill out my secure online application. This will give me all the information I will need to pre approve you.

 

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