A mortgage is one of the best ways to help pay for a home. Of course, getting approved for a loan is not easy. There are a number of things you’ll need to consider to find out if you are eligible for a mortgage. The pre-approval process will determine how much you qualify for. A mortgage company will examine you as a candidate and determine the largest mortgage amount that they are willing to lend. This process will result in a document, known as the pre-approval letter, stating your mortgage capacity. In some cases, home sellers request to see this document when offers are made on their properties.
Documentation You’ll Need
To begin the process you will need to collect and organize all of your income documentation. This includes recent pay sheets and tax returns, as well as records of incoming cash flow and other sources that contribute to your income. Your income will be the primary factor that affects your mortgage quote.
Another important piece of information you need to present to your lender is your credit score. You are able to obtain a free credit score once a year. Your credit score will provide you with a numerical value that tells lenders a fast and objective measurement of your credit risk. The higher the number, the more likely you are to receive a good mortgage amount.
In order to get a pre-approval you need a lender that you would like to build a relationship with. Ideally, you will be able to use the same lender/mortgage broker for your purchase. Finding a good mortgage rate is the key to finding a good lender. Do your research on the Internet, check out reputed and well-liked lenders and ask for advice from friends and family who have been in similar situations. The most important thing about obtaining a mortgage is the mortgage percentage.
Be sure to look into the lowest interest rate for the type of mortgage that suits your needs. In addition, consider the length of the mortgage, and the down payment that is required.
What To Expect
Along the process of securing a mortgage, be prepared for some very high quotes. Lenders look at your ability to pay the down payment for your chosen property as well as to cover the closing costs. If you are looking for a new property home, you will need to have about 5% for the down payment along with another 2-3% to manage the closing costs. The closing costs include assessment, the mortgage commission and title insurance among other things.
Your chosen lender will request specific information from your employers, your social security information, your current debt status as well as the location of any liquid cash assets. It’s always helpful to have this information ready and on hand as it will greatly speeds up the process with minimal hassle.
When you’re ready to look for a home, trust Frankel Realty to take care of your needs. We have been servicing the Palm Beaches for over 30 years. Call us today on (561) 427-2154 to take an exclusive look at our home listings.