Buying #4: Qualifying for a loan
How much of a house can you afford? Can you qualify for a $400,000 house? If you like a house that is listed at $450,000, can you qualify for $50,000 more?
The easiest way to take the guesswork out of qualifying for a loan is to go to a reputable lender. This does not always mean your bank. Mortgage brokers oftentimes offer creative solutions to your particular situation. But you must find one that is honest. By honest I mean they should not sell you the program that makes them the most money. Do they understand your circumstances and try to offer you the best loan option? Do they explain all options available and not just one type of loan?
The lender that you go to for prequalification is not necessarily the lender you will use to obtain your loan for purchase. To get prequalified, you should not pay any upfront fees. You are under no obligation to use this lender to obtain your loan. So at this stage of the buying process, do not worry about comparing rates and fees.
Be upfront with the lender about your financial situation. They can then figure for you the maximum price of home you can qualify for.
Just because you know the maximum price, though, doesn’t mean that’s going to be the actual price. How do you determine the price to shop for? What factors do you need to keep in mind? Read on to find out!
Want to jump quickly to the other Buying posts? Here’s an index to help you out.
#1: Getting ready to buy
#2: Looking at finances
#3: Checking your credit
#4: Qualifying for a loan
#5: Determining the price to shop for
#6: Finding the location
#7: Proximity to your workplace
#8: Choosing your agent
#9: Cautions in the search
#10: Moving into your new home