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STEPS TO HOME OWNERSHlP - GET LOAN PREAPPROVAL


Fri, Feb 4th, 2011
Posted in Ask the Expert

BRENDA SHELDON

STEPS TO HOME OWNERSHlP - GET LOAN PREAPPROVAL Few people can buy a home for cash. According to the National Association for Realtors (NAR) nearly 9 out of 10 buyers finance their home which means that virtually all buyers, especially first-time home buyers, required a loan. The real issue with real estate financing is getting the loan that's right for you - the mortgage with the lower cost and best terms.

 Realtors routinely suggest that the buyers start the mortgage process well before making an offer on a home. We recommend preapprovals for another reason: Purchase forms require buyers to apply for financing within a given time period, in many cases, 7-10 days. By meeting with the loan officers in advance and identifying mortgage programs, it won't be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option.

 WHAT IS IT? "Preapproval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.

 Although not a final loan commitment, the preapproval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fall through because financing can not be obtained. Your realtor may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms.

 Your loan officer will carefully review your financial situation, including your credit report and other information. The lender will suggest programs which most-closely meet your needs.

 Having met with your loan officer to get your preapproval process started is proactive when purchasing a home. It also helps you and your realtor determine what price range of homes you should be considering for purchase. Once an offer has been made on a home your lender and realtor will work closely with you to bring the transaction to a successful closing.

FOR ALL YOUR REAL ESTATE NEEDS, PLEASE GIVE ME A CALL! 507-346-2060

BRENDA SHELDON,

507-346-2060 Spring Valley

507-424-6036 Rochester

507-951-2071 Cell

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