section explores the world of home buying finance-the good and the bad. It shows
you how to jump into the process like a pro and what hurdles to look for and how
to scale them. It offers a peek at the pre-approval process and lists the steps
needed to apply for the actual loan. The type of loan you select will determine
how much you end up paying in the long run. It determines your future. A lender
comparison chart will help you sort out the maze of financial terms that will
be thrown at you during this whole ordeal. You need to be armed and ready to tackle
the financial end of matters. Buying a home is the single largest investment most
people make. Learn these action steps and set yourself up for success. The Step
#2: Financing section enables you to have a basic knowledge of the financial world
so you can make informed decisions and take the necessary first steps to get your
The mortgage loan you choose will determine your current and future financial
status. Don't be swayed by low introductory rates. Know your terms and learn how
to get the best deal.
Here's an outline of what's in store for you in this section:
Fix It! Mistakes Will Slow You Down
Think & Do Reminders
The Loan Process: How Does it Work?
What Happens After You Apply?
Insufficient Income to Qualify
Make a Decision
Think & Do Reminders
Nearly every first-time buyer has been pre-qualified before
they ever see their first house. But what does this mean? It only means that you
know approximately how large a loan you can get based on a few answers given to
a lender's questions. This is just the first step. You haven't been pre-approved
yet. That is where the real work begins. Pre-qualification
is unverified. To get pre-approved, a lender will look at your credit
report and review your financial data. This is where the fun begins.
Going through the pre-approval
process may seem like you are getting ahead of the game, and you are. You are
actually positioning yourself ahead of your competition. This is what may allow
you to get your dream house over another family who isn't quite so prepared. Pre-approval
gives you buying power with sellers who in some area may be swarmed by prospective
homebuyers. It also puts your financing on the fast track so you can close the
These are all pretty good
reasons to go through the process early. But there are other more compelling reasons
to plan ahead. Home sales contract
usually include a grace period to obtain financing. These can be up to 30 days
or less depending on the number of other offers. If your loan doesn't come through
in that grace period, you lose the house. That is reason enough to gain pre-approval.
It all begins with the loan underwriters.
They will examine your savings or cash-on-hand, your income and your debt
to determine how much you can qualify for. To get a head start on the loan pre-approval
process, you'll need to gather some documents. But the biggest part of the puzzle
at this point is the credit report.
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