Get Pre-Approved before House Hunting

By
Mortgage and Lending with Guaranteed Home Mortgage Company

It is very important that you get pre-approved before beginning your search for your new home. This statement holds true always, but is especially important in today's credit tightened mortgage market.

I spoke with a prospective customer the other day who had found a home that he wanted to purchase with his wife. They have always rented and were tired of not building equity and throwing their money away renting. This makes sense. He called me and, after speaking with him and taking an application it sounded like there would be no issues. Well, after pulling his credit I had to inform him that he did not qualify to purchase this home based on his credit.

Nowadays, banks are stricter in terms of debt ratio (your gross income/proposed housing payment including taxes and insurance) and credit score than in prior years. I don't necessarily think this is a bad thing. They want to make sure that you have a history of paying your bills on time and that you can afford the new housing payment so they won't need to foreclose. It makes sense.

So that you don't have your heart broken when you think you're going to purchase your dream house, have a reputable mortgage banker/broker take an application and pull your credit and issue you a pre-approval. This way you know that you will have the financing to act when you find that great deal in today's depressed real estate market.

 

Comments (1)

Anonymous
Gayle Jones

Do you leand mortgages to people in Canada?

Jan 30, 2012 06:26 AM
#1