We all know you're just dying to get out there and look at some B-E-A-utiful homes but, please, don't do that yet. Even if Mom & Dad, Grandma or Uncle Jim says "I'll give you whatever amount you want" don't commit until the dollars are actually in your hand or at least in your bank account. Like most of us you're going to need a mortgage instead. Hopefully, you're still in the game after an in-depth review of your credit report. Sometimes the possibility arises that waiting a little longer may benefit you in the long run. The fear of rising interest rates is on everyone's mind these days but from my perspective our economy is still too weak to make any major leaps there. If anything we'll likely see small fractional increases but a full percentage point or more is highly unlikely in the near future. We still are experiencing near historic lows which have only one direction to move but when done right you'll be in your new home within 6 months.
You can check interest rates on-line or in most business sections of your local newspaper. Remember this is not a contest of who can be the fastest but who offers the best terms and rates for YOU. I won't go into specifics about pre-qualifying and pre-approvals but it's only the latter that will concern you, the realty associates and the Seller. Generally the pre-approval has a life span of about 6 months. They can also be renewed after another credit check. A mortgage pre-approval basically says that you've passed muster for a loan of "X" amount of dollars and as long as the property appraises your lender will approve the loan. It is not free but does provide the freedom to know what price home you can afford. Again, hopefully you haven't been out there looking because this is when reality enters the fray.
Your bank may be a source you're most comfortable with and may offer discounted rates for existing account holders. You'll need to have I.D., past three years of Income Tax records, two to three of your
recent pay stubs, social security number and a lot of patience. Once again, if you're flush with cash you can eliminate this step altogether.
While reading this, please understand that now is not the time to buy cars, furniture, boats or RV's whether on credit or with cash. Lenders have a way of becoming too concerned when money flows freely about after beginning their underwriting process. Strive for financial stability at all times!
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