The Home Buying & Selling Process – Securing a Mortgage Pre-Approval

First things first; as a buyer, the most important process to accomplish before you see any property, go on a computer and search for a home, see a Realtor, or anything is to GET PRE-APPROVED!  You need a bona-fide lending institution to make sure you have the proper down-payment, credit history, debt/income ratio and income level in order to purchase a home.

To get a pre-approval, you need to go to a bank, mortgage banker or broker. You can find these people almost anywhere, from the phone book, to Internet to a referral. Be sure to speak with a minimum of two to three representatives from different lending institutions, as each lending institution has different lending programs at different interest rates at different times.

The mortgage banker/broker will ask you a lot of questions.  The key thing here is that the mortgage representative will run a credit report for you to generate a credit score.  This score will determine how much of a risk the bank may have to take in giving you a loan. The representative will ask you additional questions, and once all the information is compiled, you will then be told how much you can spend on a property, depending on how much cash you want to use of your own versus how much you want to finance.

The mortgage representative will give you a written Mortgage Pre-Approval, stating that he or she has verified your credit and taken an income and debt history. This will also establish how much you may spend on a property, how much you can put down as cash, and how much you will mortgage. This is the document you will give to your agent so he or she knows what kind of properties to show you!

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