Obtain Financial Preapproval
We highly encourage buyers apply for a loan and obtain approval before they find the home they want to buy. Why?
Prequalifying will help you in the following ways:
Generally, interest rates are locked in for a set period of time. You will know in advance what your payment will be on offers you choose to make. You will not waste time considering homes that do not fit into your budget.
Preapproval will help you in the following ways:
A seller may choose to make concessions if they know that your financing is secured. This will make your offer like a cash buyer and more competitive. You can select the best loan package without being under pressure.
How Much Will the Lender Lend?
Down Payment Requirements:
This varies depending on your credit scores!
Fees for loan processing and other closing costs are negotiable with the seller. Typically, total closing costs will range between 2-5% of your mortgage loan.
Qualifying for the Mortgage:
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)
- Homeowner’s Insurance (I)
- Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your gross monthly income. These key factors determine your ability to secure a home loan: Credit Report, Assets, Income, and Property Value.
Use the Quick Qualifier to get preliminary information on your mortgage payment. There are three key factors to consider:
- Down payment
- Ability to qualify for a mortgage
- Closing costs associated with your purchase