The benefits of a preapproval (not prequalification) for Frisco TX Home Loans
A lot of consumers are not educated enough on how they should go about buying a home.
This can be extremely stressful or enjoyable depending on how you choose to go about the home buying process for homes in Frisco TX and surrounding areas. The key is to take the proper steps to educate yourself on your buying power, initial investment, and taking some time to think about your lifestyle choices. This article will cover all of these.
Education
The steps necessary to purchasing a home in Frisco, Texas starts with getting pre-approved for your home loan. Notice we did not say get prequalified- in today’s world a prequalification is not meaningful. It is important to choose a mortgage lender that can offer no cost pre-approvals and home buyer counseling. The process can be lengthy, but you must include two years of tax returns, one month of paystubs, two months of all your liquid asset account statements which include 401K's, IRA's, Checking, Savings, and stocks to give your mortgage banker authorization 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. The type of loan structure and initial investment that best fits your needs and 3. What type of house payment you feel comfortable paying for and qualify for.
Initial Investment
There are many different types of loan programs available in the mortgage markets ranging from niche 100% financing which include VA and USDA loans, to FHA loans (with 3.5% down payment), to Conventional loans that begin with 5% down payment options. Depending on how the loan and preapproval is structured- you should also have your mortgage banker estimate the remaining part of your initial investment, taking into consideration closing costs, taxes and insurance on your new home purchase, and whether there are any seller contributions or lender contributions involved. 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. Also, you will have a "head start" on your Frisco TX Home Loans and the surrounding areas that gives you the ability to have the "buying power of a cash buyer". Have your mortgage lender send a pre-approval letter that matches up with the offer you just submitted so that the seller knows to get you pre-approved for inspections, an appraisal, and for title work to come 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
The importance of knowing your full budgeting of your entire house payment and all other monthly obligations cannot be underestimated. You have numerous options. If you are a younger professional that is just getting started in your career, it is important that you buy in the upper level of the qualifying range for your home purchase knowing that your 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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