Is it better to go with a credit union, mortgage broker or a local bank? Does anyone have any recommendations as to a good mortgage broker in the Litchfield Park, Goodyear or Avondale areas?
Buyer's Tip Series: Stop Looking For a New Home! Get Pre-Qualified First!
Your First Step in Buying Your New Home: Getting Pre-qualified
If you are currently looking to purchase a new home right now and haven't spoken to a lender yet, then stop looking for your new home! It may sound like weird advice, but the single most important step a potential homebuyer can take starts before the home search. Talking to a mortgage specialist and getting a mortgage pre-qualification should always be a buyer's first step.
By taking the time to talk with a reputable mortgage lender before beginning your home search process, you will save time, money and frustration later on. Most importantly, a pre-approval minimizes potential issues that may arise during the escrow process. In addition, the State of Arizona requires a Loan Status Report with every offer to purchase real estate. So before you can place an offer on a property, you have to get pre-qualified.
The Loan Status Report, or LSR, is a simple one-page document that the mortgage lender fills out after qualifying a buyer. Most mortgage specialists can issue an LSR with a quick ten to fifteen minute phone consultation. Before calling the lender, however, gather your financial information such as current income, debt, social security number, etc. The lender will need this information for your pre-qualification.
While pre-qualification is a necessity to place an offer on a property, a pre-approval with a lender gives buyers an advantage when negotiating a contract with a seller. So what is the difference between a pre-qualification and a pre-approval? Typically when a lender pre-qualifies a buyer, it is done over the phone based on financial information provided by the buyer. A credit report is ordered and the mortgage rep then estimates the amount of the mortgage that the buyer can afford. The mortgage lender then issues a LSR stating they have been pre-qualified.
However, for a pre-approval, the mortgage specialist requires actual documentation and verifies the financial data. While it may take longer, a pre-approval is more reliable and it shortens the mortgage process and approval process later on for the buyer. Pre-approvals typically provide the ability for a fast close if the need should arise.
In addition knowing exactly how much a buyer can be approved for can help set a realistic idea of what the monthly mortgage payment will be. You may be approved for a $200,000 home, but can you realistically handle that payment every month? Getting pre-approved saves buyers time by eliminating those homes that are out of the target price range.
With today's challenging and changing real estate market, a knowledgeable mortgage specialist is invaluable when purchasing a home. A reputable mortgage specialist can advise the best way to make the loan process as painless as possible by minimizing any potential problems that may arise. Speak to a real estate agent, neighbors, friends and family for recommendations for a reputable mortgage lender that can help you with the purchase of your new home.
Good Luck in Your Home Search!
Cinda Rose, REALTOR®
CDPE, CSSN, SFR
Looking for a new home in the West Valley? Check out www.TheWestValleyHomeTeam.com for more information about buying a home, getting a FREE Listingbook Account, searching the MLS and more! We specialize in real estate in the West Valley, including Litchfield Park, Goodyear, Avondale, Buckeye and the surrounding areas.