Q. How much house can I afford?

A. Know what you can buy by getting pre-approved.

A pre-approved buyer has a significant advantage over other people bidding on the same home. Also, knowing your borrowing limit means you can look for a home with the security of knowing you'll be able to obtain financing and be comfortable with the payments.

Clients come to see me thinking they can only qualify for a certain price range and, after the pre-approval process, I'm able to show them that in fact they can purchase a much better quality home with lower payments than they imagined. Because of the ridiculously low mortgage rates we are still enjoying, and the very generous guidelines of FHA financing, your dream home is quite likely within your reach.

Getting pre-approved for a mortgage can save untold amounts of stress and make the buying process much easier.



Here's how it works

Choose a reputable and experienced loan consultant and discuss your objectives and financial history. In my business, I value meeting all of my clients in person because it gives me a first hand and accurate picture of who they are and what they're working toward with their real estate investments. Questions such as the time horizon a client has for owning the property and their career path for the future and how it may impact their income. Then, I feel I have an enhanced understanding of how to assist my clients with the best loan programs.

A mortgage broker will review your credit and verify the information you provided. The next step is to discuss the myriad of loan program options and assess what your payments will be.

Reminder: Make sure your loan consultant reviews with you what your homeowner's taxes and insurance will be. Even though you might not include them in your monthly payment, these are still part of your total monthly housing cost.

Once a lender approves you for a loan, a pre-approval letter can be written.

Now something wonderful happens. You and your realtor can go out house buying instead of house shopping, knowing that when you find your dream home, you can buy it.

Another very important thing to remember is that it's not just your realtor who will request a pre-approval. The seller and the seller's agent will also be looking for that pre-approval letter. Imagine you are a seller who receives two bids within a few thousand dollars of each other. One bid is presented with a very strong pre-approval letter and verification of funds to close, the other is an offer involving financing but without a pre-approval letter. As a seller you're likely to go with the offer that includes the pre-approval.



Susan Costello, 24/7 Mortgage Consultant, owns Home Sweet Home Loans. You can reach her at 530-273-8658.