September 18th, 2022 4:53 PM by Judy Chapman
When you are preparing to purchase a new property, the very first thing you need to do is to get pre qualified. Why?? It is simple. 1) You want to know what your credit score is--Why?? Because your credit score can determine if you will be able to get a loan or not, and also how much interest you will have to pay on the loan. If your credit is poor, you are more of a risk and the lender might give you an even higher interest rate. So credit score is important. I know....Your first question.....What does my credit score need to be. I will defer to your lender on that question. They can give you that information and there are many different programs for many different credit scores. 2) Getting pre-qualified lets you know "How Much" home you can buy, or how much you can spend. If I am helping you find homes in the $500K range and you only qualify for $300K loan with no money in the bank, I am sabotaging you and me!! I am basically setting you up to fail, because you won't be able to find the house you want with the funds you have available to you. Make sense?? 3) You need to know if you can "afford" to spend the amount you are pre-qualified for. If you have $1000 a month bill at the nursery, and $1000 spent at the grocery store each month, and $500 car insurance payment (because of those speeding tickets), you might not be able to afford the payment your lender gives you for your loan. They look at credit card bills, loans, etc. You will know what you can and cannot do. Oh! Also make sure the lender tells you "PITI" for your payment. That means Principal, Interest, Taxes, and Insurance. If they only give you "P/I" the escrow (T/I) could add another $200 to your monthly payment. So, back to your original question, How Do I Know Which Lender To Use? Start with the bank you work with now. If you have checking/savings there, you have already established a relationship with them. See what they have to offer. Shop around, but start with them first. (Also make them tell you APR on your loan. Use that to compare to other lenders.) Hope this helps!! Hope you will subscribe to the blogs!!