Why I Need A Pre-Approval
Why I Need A Pre-Approval
Mortgage Pre-Approval
Now that you made the decision to buy a house. The first question that you’ll need to answer is, How much can I afford to buy a house (my future home)?
It’s recommended that you work with your lender to get pre-approved before you begin house hunting. A pre-approval will tell you how much home you can afford and to show sellers you are serious about buying your dream home and can help you move faster, with greater confidence.
Most mortgage discussions start with a credit score. A great place to start verifying how much house you can afford is by checking your credit report. You’re entitled to one free copy every year from each of the three major credit reporting agencies, Experian, Equifax
and Transunion.
Access them by visiting Annualcreditreport.com--it’s the only site authorized by the US Government. Your credit score is also available through numerous institutions and lenders, often free of charge.
Check out the CFPB website on credit reports and other info at https://www.consumerfinance.gov/ask-cfpb/category-credit-reporting/, also Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website: http://www.freddiemac.com/
To get pre-approved, you’ll complete your lender’s loan application, providing them with important information about your credit, debt, work history, down payment, and residential history. When your lender determines that you qualify, they’ll provide you with a pre-approval letter outlining the maximum amount you are qualified to borrow. Keep in mind that You should only borrow what is comfortable for you, making sure not to overextend yourself. Once you determine a housing budget that you can live with now you’ll be able to make the most realistic decisions about which homes to consider.
Something to think about,
It’s easy to buy that big house with two incomes you should try a pre-approval with one income, cause if something should happen to one income like losing a job having children or injury or sickness you will still be able to make mortgage payments etc. Base everything on one income. Stay in your financial comfort zone.