To buy any house, condo or mobile home, many real estate agents and sellers only accept offers from buyers who are pre-qualified for a home loan or have cash in hand. It is a very rare occasion that someone has adequate money to purchase a new home without some kind of financing required.
Your Credit History Is Relevant
Pre-qualification for any mortgage is heavily based on your current credit score and your debt to income ratios. Financial institutions want confirmation that you have paid bills when due, have the resources available to manage the mortgage for which you are requesting and that you are not presently behind on any of your monthly payment loans.
While a poor credit score is not necessarily %the kiss of death to a% mortgage pre-qualification, having a low credit score typically means a higher interest rate. Typically, the poorer your credit is, the more you will pay overall when borrowing money from a financial institution.
Your best plan of action is to make certain you pay on time. Additionally, never get in over your head with debt. Download a copy of your credit report before you fill out an application for any loans and verify that the information is correct. If it displays late payments that were not, in reality, late, find canceled checks and bank statements as proof and then write or fax the credit bureaus and ask for that information to be adjusted. The same is relevant to accounts that are not ones you applied for or unauthorized charges.
Shop Online for Good Rates
Bank interest rates will fluctuate. To start, there are adjustable and fixed rates. When it comes to adjustable rates, your starting interest rate is low, but it may go up or fall depending on what the prime rate does and the indexes that it the loan is connected to. While adjustable rates can be attractive to the bargain hunter, your mortgage payment usually rises throughout the life of the loan making it tough to get a hold of your mortgage payment.
Fixed rates remain steady throughout the life of your loan, so that you know exactly how much you will be paying for the next fifteen to thirty years. With the arrival of the Internet, it is much easier to find rates that fit your budget. Many online sites will even put rates side by side for you so that you have a bargaining chip to get banks to compete for your business.
All interest rates are linked to points. Points are a percentage of your loan amount that you pay to find a lower interest rate. You will find points ranging from zero to three. Most people go for zero-point loans because they do not have the funds for the extra money required. Talk to your lender about the alternatives. Most are more than prepared to work out a mortgage loan that fits your needs.
Do Not Purchase More than You Can Manage Financially
Though not as common, in the past lenders and realtors were more than willing to help you buy a home out of your budget by employing alternate mortgage plans like interest-only loans. Usually, these loans are affordable, but do not permit you to build up any equity in your home.
On the other hand, consider how much money you can comfortably afford to pay every month and request no more than that amount. You can always bargain sellers down in price and you will have the home you like at a monthly payment you can handily afford.
Lee Bell
http://www.articlesbase.com/mortgage-articles/prequalify-for-a-home-loan-before-house-hunting-734580.html
#1 by Mickey.Slick on July 28, 2010 - 7:44 pm
info on how to go about buying a home?
i’m 26, my fiance is 25. we’re getting married may 2009 and want to find a home before then, before end of year if possible. what are the steps to finding one?
should we talk to a mortgage company first? pre-qualify for loans? or should we go house hunting first?
i just found this house and called the listing agent, and she flat out told me that we should be talking to a mortgage company before we even look at houses, but then if i go on-line and do the pre-qualify stuff, they specifically ask how much the home you are looking at costs. do the mortgage places do that too? one home we want to see is twice the price of another, so should we ask about the higher one or the lower one? i personally think i need to see the house before i even think about asking about fiancing.
this realtor wouldnt even take us to see the house. she said she would go by it and take a look (apparently she hasnt ever seen it before – its bank owned) and see if its in bad condition.
i feel like this woman didnt give a crap about my fiance and i and just thinks we’re kids. its not our fault our price range is low and we’re looking at foreclosures, but its still her job to at least show us the house right? i mean she DID contact me after i clicked the link that said "schedule and appointment" and she wouldnt even do that!!!
#2 by tone on July 29, 2010 - 12:46 am
Report the realtor to the real estate board and her supervisors immediately. She is not a reputable agent. Yes she must show house. Many agents only show you houses they list to get more commission.
Go house hunting and area hunting, do some research on demographic, taxes, sales, etc. Look at commutes to work, prices, etc. Then start looking for house. If you both have good credit and money for downpayment go look at houses.
Be sure to put in some clauses when placing good faith deposit:
1. Buyer reserves right to cancel agreement and receives refund back if house inspection shows major repairs are needed, roof leaks or insect infestation.
2. VERY IMPORTANT Buyer will be released from contract is a conventional 30 year mortgage cannot be secured at a interest rate under 10% with in 60 days and deposit refunded.
3. VERY IMOPRTANT Buyer to be release from contract if house does not appraise at 20% above asking price and deposit refunded.
4. Buyer to be released if there are any judgments or liens that cannot be cleared up within 30 days prior to closing and deposit refunded.
Good luck
DO NOT apply on line for loan ever…..it will kill credit. Go to your bank or a broker – request credit be run ONLY ONCE and PRE-QUALIFY………once credit reposrt is pulled you are entitled to report and it is valid for 90 days so it will not have to be pulled again. Any broker or bank can use it to apply for mtg. Yes banks and brokers will tell you all the costs, but you can look up on line yourself…..and a reputable agent will assist.
References :
credit/mortgage/ financial conselor
#3 by irishwhiskeyslammer on July 29, 2010 - 12:48 am
Realestate people are douchbags. Find a home that is bank owned, if u like it, get the address… and take it to the county assesors office and do a title search. They can tell you who owns the home and then call them and make an offer. Have an inspection and an appraisal done before you make the offer. Don’t offer them what they are asking. Bring them down because there are alot of bank owned homes out there. Like almost 2 million
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#4 by BOB S on July 29, 2010 - 12:50 am
WHERE ARE YOU LOOKING TO BUY
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#5 by pedro l on July 29, 2010 - 12:52 am
well first you guys are not too young to buy a house and well as a broker the first thing that i ask my clients is how much can they pay a monthly mortgage payment because that would tell me how much you can buy but at was to be a payment you can afford on the monthly basics and you can still have a flow money for your other expensives so you guys deside how much do you want your mortgage payment to be and that would told you how much you can afford any more questions please feel free to contact me ok take care sin-Pedro
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#6 by triad_historic_homes on July 29, 2010 - 12:54 am
While I certainly do not condone the Listing Agent’s attitude, she is right, that you should speak with a mortgage lender first. That does not mean pre-qualifying on-line, it means finding a lender locally, filling out a pre-approval application (which will ask for A LOT of information), then sitting down with them to discuss the various options that best it your personal situation (credit scores, income, how much of a downpayment you’ll be making, etc.).
Once you have done that, you Will have an idea of how much a given purchase price will cost you, both in terms of cash to buy the house, and in monthly payments.
From there, I recommend finding a REALTOR in you area to represent you as a buyer’s agent. They can help guide you through the process and will be looking out for your best interests. At a minimum, any REALTOR doing buyer’s agency (and almost all of them do) should be willing to met you in there office for 30-60 minutes and discuss the process of buying a home.
To find a good REALTOR, you can ask your friends and family if they have one they recommend, or, if you would like to contact me off-post and let me know where you are planing to buy a home, I may know an agent in your area (I am a REALTOR in North Carolina). Triad_Historic_Homes (at) yahoo.com
References :
NC REALTOR
#7 by glenn on July 29, 2010 - 12:56 am
1st Don’t call the listing agent. Ask a friend or relative who they have used as a real estate buyer’s agent. Contact that buyer’s agent and use them to help you find a house. The owner is intending on paying the commission for the listing agent and the buyers agent out of the proceeds of the sale so you will not be out of pocket for your agent.
2nd Don’t get a loan over the internet. Don’t apply for a loan over the internet. Ask your friends or relatives who they have used as a mortgage broker and contact them. It would be great if you met them face to face, but if they are local you know that you always can meet them face to face in a crisis.
3rd It is very common for you to need a pre qualification letter before you make any offers. Most sellers will not consider an offer without one.
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#8 by smileyc117 on July 29, 2010 - 12:58 am
Well you definitely don’t want to go through that realtor. Anyway, most realtors will want to know that you’ve at least been pre-approved for a mortgage so that they know they are not wasting their time with you. However, preapprovals only last for a couple of months and getting pre-approved requires that the bank pulls your credit report and that counts as an inquiry on your credit which can eventually hurt your credit score. What you should do is find some houses that have Open Houses scheduled and go check them out. Only get preapproved once you know for sure what you are looking for, etc. Once you get preapproved then find a realtor you are confident in and go from there. Any reputable real estate agent will be more than happy to take you on as clients without making pre-judgements about you. Also remember that the amount banks will approve you for is going to be a bit more than what you will actually be able to comfortably afford on a monthly basis.
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I just went through this process.
#9 by Alabama Realtor on July 29, 2010 - 1:00 am
Your first step should be to talk to a mortgage officer. Sit down with your phone book and call to talk to them, don’t trust the Internet sites. This is important because it gives you a realistic price that you have to stay under. And it will let you know that you qualify to purchase a home before you go looking. The Realtor you talked to wasn’t out of line to send you for pre-qualification first. Maybe she could have done it more politely than she did, but it is her job to protect her sellers. Before she had them clean the house and leave it so she could show it she wants to know she is not completely wasting every ones time.
But that also protects you. If you just go out looking at all the beautiful homes you want to see regardless of price the homes you will be able to afford won’t look very good. You will already have a vision in your head of what your house is "supposed" to look like and will wind up unhappy with those in your price range.
Hope this helps,
Josh
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