| Pre-Qualified or Pre-Approved – Which is Better? |
 |
 |
 |
|
For new homebuyers, the recent housing news shows economic indicators pointing towards a continuing housing recovery here in the Inland Empire. According to the most recent reports from the Construction Industry Research Board (CIRB) homebuilders in San Bernardino County in the first eight months of 2009 were issued permits for nearly 1,400 single and multi - family homes here. With nearly one third of those being multi - family uses such as condominiums and town homes, that means that our housing market offers a wide selection of opportunities for all homebuyers.According to the latest figures from the industry’s leading tracking firm DataQuick, San Bernardino County continues to lead Southern California in both home sales and affordability. In fact, the median San Bernardino County home is less than half the median price of nearly every other Southern California county’s median price. What this adds up to for new homebuyers is that now is a great time to buy a new Inland Empire home. However, even with increasing opportunities and positive economic news, it helps to remember that today’s credit landscape is far different than it was two years ago. That is why today’s prospective homebuyers might consider a helpful step to ensure the best and easiest home purchase: consider mortgage pre-qualification or pre-approval. Mortgage pre-qualification or pre-approval provides an important benefit for new homebuyers - especially first-time homebuyers by allowing them to target the best investment they can make while saving time and money throughout the home buying process. Pre - qualification and pre-approval are two very different processes. Pre-Qualification differs from pre – approval because when homebuyers pre – qualify for a mortgage, their overall income and expenses will be used to calculate various debt – to – income ratios by the lender. This helps the lender estimate what size mortgage for which the homebuyer may be qualified. With pre – qualification, the lender does not verify the homebuyer’s financial information, so the process basically gives homebuyers a realistic guide to the price range of homes they can afford and a general idea of what the monthly payment will look like because it is not a specific commitment to lend money. The pre – approval process differs from a pre-qualification in that the homebuyer’s finances are examined and verified in greater depth. This approach ultimately leads to a commitment for a specific loan amount. This helps target the right home in the right price range. Besides a specific commitment to find and fund a mortgage within a given time period, the pre -approval may also include a commitment to lock in an interest rate program for that same time period. Finding the right mortgage begins with finding the right lender. Most homebuyers start with their existing bank or a previous lender, but since the American home is generally the biggest and best investment most Americans will ever make, it helps to shop around. Since many builders partner with a preferred lender, ask your homebuilder to check out their programs. The lender will evaluate credit history, verify income, length of employment and the source of the down payment. After reviewing this information, the lender will know the maximum loan amount they can offer plus any special loan programs that may be available. Accuracy and honesty are the keys to obtaining a solid pre-approval commitment. Your income and credit report will be checked again before the loan closes. If any errors, misrepresentations or omissions surface at this point, the pre-approval will be rescinded. This process should also reveal any credit problems that might otherwise surface later in your loan qualification phase. Knowing that your credit is already excellent or can be repaired will eliminate a lot of stress and uncertainty when you’re looking for a new home. Remember, your mortgage is the gateway to your American Dream of homeownership. There are many mortgage opportunities available to homebuyers today and rates are still hovering at historic lows. By getting pre-qualified or pre-approved, you will make purchasing your home as easy as possible. It may be the best first step you take towards owning your American Dream. ***** PUBLISHED OCTOBER 17, 2009
Set as favorite
Bookmark
Email This
Hits: 343 Comments (0)
 |
Subscribe to this comment's feed
