The benefits of a pre-approval and not a pre-qualification for Fredericksburg TX Home Loans
Many consumers are not educated on the proper way to 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 Fredericksburg TX and 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. Each of these will be discussed in this article.
Education
The steps necessary to purchasing a home in Fredericksburg, 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. You should choose a mortgage banker that offers no cost preapprovals and homebuyer 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 essential that you provide all page of the bank statements as well as explain these meaning prove where the 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
Many types of loan programs are available in the mortgage markets that range from 100% financing on VA and USDA loans, to FHA loans with a 3.5% down payment, and Conventional Loans that start with a 5% down payment option. Depending on the way your pre-approval and loan is structured, you should have your mortgage banker estimate the remaining initial investment, calculate your taxes and insurance on your new home payment, look at your closing costs and determine whether or not there are lender or seller 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 home loan in Fredericksburg, Texas or surrounding area that approaches you having 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. You will also have much less stress- as you will not be wondering if you can qualify or if something shows up on your credit report that may cause a delay or for you to be turned down.
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. For those whose income is projected to increase (like a younger professional getting started in their career), you may elect to buy at the upper end of your qualifying range in terms of house purchase knowing more discretionary income is on the way. If you are on a flatter income, you want to choose what level of discretionary income you want to reserve for new cars, for you to travel, for you to eat out, and for money to furnish and update your home. It is important to seriously consider what final purchase price you are comfortable with to enhance your lifestyle after purchasing your home.
Our team is standing by to assist you with all of the 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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