Buying a Home - How Much Can You Afford?

Prior to looking for prospects for your new house, you have to find out first how much your pocket can pay for. In determining this, you can go for a pre-qualified or a pre-approved loan. With the aid of your real estate agent, you can find a mortgage broker for either of the aforementioned procedures.

Things to do to get pre-qualified
Getting pre-qualified can be completed through an online or an over the phone transaction. Presenting your financial records is not mandatory. You will only be requested to give basic financial information such as your current income and debt load. The lender will then use this data to come up with a ballpark figure of the highest amount of loan that can be given to you.

Requirements for a pre-approval loan

A pre-approval loan is a more in-depth process and entails a lot of paperwork. Your real estate agent can assist you with the preparation of these requirements. The lender will study and assess your financial status basing from documents such as your bank statements, tax records, and credit accounts, among others. This is more dependable compared to getting pre-qualified since being pre-approved means that a certain lender sees you as someone trustworthy to deal and transact with.

Questions to ask when looking for a lender

Your real estate agent normally will recommend a mortgage broker whom he or she has already worked with before. Nevertheless, you may also go and look for your own lender. The following are some of the essential questions you should ask a lender:

1.Kindly provide me with a list of your available loan programs. Among them, which is the best option for me?
2.How long will my loan request be granted?
3.Are there any line items in the loan agreement that can be negotiated? If so, what are they?
4.Please discuss with me your policy when it comes to locking interest rates.
5.What is your policy for locking-in interest rates? Will a smaller rate be honored just in case it will decline during the lock-in period?
6.Do I need to pay for the preparation of my loan?