The benefits of a preapproval (not prequalification) for Houston TX Home Loans
A lot of consumers are not educated enough on how they should go about buying a home.
Of course this is a big question that can stressful or enjoyable, it just depends on the steps you take in the home buying process for Houston TX Home Loans and the surrounding areas. You must take the steps necessary to educate yourself on your buying power, take some time to think about your lifestyle choices, and the initial investment. We will discuss each of these in this article.
Education
The proper way to go about buying a home in Houston, Texas begins with getting preapproved for your home loan. Please note that we did not say to get pre-qualified, in today's mortgage world a pre-qualification means nothing. You should choose a mortgage lender that offers you no cost home buyer counseling and pre-approvals. During the course of this process, you will provide two years of tax returns, one month's full paystubs from recent job, and two months of all your liquid assets accounting statements that include-checking, savings, stocks, 401K' and IRA's so that you can authorize your mortgage lender to pull your credit report. It is important to note you will need to provide all pages of the bank statements, and will need to explain (source- as in prove up where money for deposits came from that went into your liquid asset accounts). The purpose of your mortgage banker analyzing this data is to establish the following: 1. How much home you can afford. 2. What type of initial investment and loan structure that is best for you and 3. What house payment you qualify for and how much you can afford to pay each month.
Initial Investment
Numerous types of loan programs are available in the mortgage industry that range from Conventional loans with 5% down payment options to FHA loans with a 3.5% down payment as well as 100% financing on VA and USDA loans. You should have your mortgage lender calculate the remaining part of your initial investment, your taxes and insurance, what your closing costs are and whether or not there are any seller or lender contributions. This is why you should consult with an experienced mortgage professional that can assist you with the best loan program for you.
Upon getting pre-approved and after having your mortgage counseling session, you should know what the price range you are must comfortable with is. You will also have a “head start” on your Houston TX Home Loans or surrounding area that approaches you having the “buying power of a cash buyer”. When you submit an offer- have your mortgage banker send a preapproval letter that matches up with your offer to let the seller know that you are preapproved subject to inspections, appraisal and title work coming back clean. This will relieve you of stress because you won't be wondering if you qualify for your loan or if something may show up on your credit report that you weren't aware of that can cause a delay or for you to be turned down for your loan.
Lifestyle Choices
It is important for you to not underestimate the budget of your entire house payment and all other monthly obligations. You have numerous options. If your income is projected to increase, you may want to buy at the upper end of the range that you qualify for in terms of your home purchase since you know more discretionary income is on the way. If you know that your income is going to be flat, you will be choosing the level of discretionary income you would want to use to reserve it for new cars, traveling, eating out,money for furnishing and updating your home, etc. It is essential to consider what the final purchase that are you comfortable with to enhance your lifestyle after purchasing your new home.
As always, we are standing by to assist you with all that is mentioned above. Just go to http://legacyfinancial.com or call Joy Bates with the Legacy Group of LeaderOne Financial at 817-860-3232 or email Joy: joybates@leader1.com.
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