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CRUCIAL QUESTIONS BEFORE PURCHASING YOUR NEW HOME.
Are You Pre-Approved? How Much Can You Afford?
These are questions you'll want to ask yourself before purchasing your new home.
How much can I afford? Many factors enter into the picture when you make this personal decision regarding how much house you can afford. How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?
This involves striking a balance and there is no definitive answer to these questions.
If you plan on a 30 year mortgage, you can probably make a lower or perhaps no down payment at all and still handle the monthly payments.
In contrast, if you plan on a 15 year mortgage, you will likely want to make a larger down payment to maintain your monthly payments at a level more affordable to you.
 How large a down payment can I make?
Although many buyers view cash on hand as the only source for a down payment, others include:
1. Using a gift is another way to fund or partially fund a down payment. Many parents, grandparents and other family members eagerly assist by making a cash gift toward purchasing your home.
2. Down payment assistance charities.
3. Equity that you have built up in your home can be applied to your down payment if you are selling your home.
In addition, we can explore other down payment options that may be suitable for you, including low down payment and 100% mortgage financing options.
What size monthly payment can I afford?
 You'll want to consider other monthly expenses you carry when making a determination as to the kind of monthly payment you can manage.
Also, there are intangible expenses or lifestyle expenses to factor in. For example, dining out, travel and when you purchase your next car can influence how much you can afford. Are you willing to limit or put off some of these expenses in order to afford a larger monthly payment?
How much can I borrow?
You will want an answer to this question prior to beginning your home search ... and I'm here to help you with this. Our mortgage calculators will help you see the the interrelationship between your down payment, monthly payment and the amount you borrow.
When is the best time to speak with my mortgage professional about my loan?
Even before you begin looking for a new home! Schedule a time to meet with me so we can figure out how much you can afford. This will put you in a superior position as a buyer. After all, what can we do for you if you have not yet negotiated a price ... and you do not know how much you wish to borrow. This will place you in a superior position as a buyer. That's when it is important to discern between being pre-qualified and and pre-approved for a loan as the distinction between the two terms will be crucial when you decide to make an offer on the home.
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ARE YOU PRE-APPROVED OR PREQUALIFIED FOR A LOAN?
THE DISTINCTION BETWEEN BEING PRE-QUALIFIED AND PRE-APPROVED.
The Prequalification Letter.
The pre-qualification letter is just an estimate of the amount you are eligible to borrow and it is not a commitment to lend.
When we pre-qualify you, we help you to determine how much of a monthly mortgage payment is affordable to you. This process is brief, to the point and paperwork is kept to a minimum
A. This is accomplished by taking into consideration your:
1. Income
2 Debts
3. Employment and
4. Residence situations
5. Funds you have available for a down payment
6. Required reserves, and some other things.
B. Based on this information we determine how much we are able to loan you.
C. We then provide you with what is known as a Pre-Qualification Letter (your real estate agent may refer to this as a "pre-qual", stating that we are working with you to find the best loan to meet your needs and that we are confident that you will qualify for a loan for a certain amount.
Being pre-qualified helps when decide to make an offer on an home you found and like:
1. It lets you know how much you can offer. Your real estate agent will assist you in deciding on an appropriate offer, and being pre-qualified provides you with the confidence to know you are capable of following through, and
2. Of greater importance, you have clout! To the home seller, your being pre-qualified is viewed like you have the cash in hand to make the deal! There is no wondering as to whether this is may ultimately be a waste of their time should you are unable to qualify for the mortgage to finance the amount you offer for the home.
To get pre-qualified for a loan:
1. I will collect information about your debt, income, and assets.
2. We’ll look at your credit profile
3. We'll assess goals for a down payment
4. We'll get an idea of different loan programs that would work for you.
5. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.
It is important to understand that:
1. A pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend.
2. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.
The Pre-Approval Process and Letter.
In order to get pre-approved:
1. You will complete a mortgage application.
2. Provide me with various information verifying your:
a. Employment
b. Assets
c. Financial status, for example:
1) W-2 forms
2) Bank records
3) Credit card statements
3. We’ll review your mortgage options and
4. Submit your application to the lender that best meets your needs.
5. Upon completion of the application process you will receive a pre-approval letter which indicates the amount your lender is willing to lend you for your home.
A pre-approval letter is not binding on the lender.
1. It is subject to an appraisal of the home you would like to purchase and certain other conditions.
2. There are changes that may occur which make it necessary for the lender to review your situation and recalcuate your mortgage accordingly, such as:
a. Changes in your financial situation
(e.g. you lose your job)
b. Interest rates rise or
c. A specified expiration date passes.
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GETTING STARTED BUYING YOUR FLORIDA DREAM HOME.
Please feel free to use the mortgage calculator available on my site. This can help you to get an idea of how much of a mortgage you are able to afford. But the best way to help is to get you pre-qualified for a mortgage loan.
I can provide answers to your questions about the mortgage process. However it is important that we meet. First, you will need need a Pre-Qualification Letter! Also, we may be able to find a different mortgage program the better suits your needs.
To get started simply complete my contact form below and let me know a good time to contact you.
I LOOK FORWARD TO ASSISTING YOU BUY YOUR DREAM HOME.
Joan Lemont
YOUR FLORIDA
MORTGAGE SPECIALIST
and
Feng Shui - Home Staging Consultant
Visit my Real Estate website and check out properties of interest to you.
Call JOAN at
954-696-0363
email: lemontj@bellsouth.net
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