Certainty, communication & being heard

Often buyers feel more comfortable using a family member or a friend.  But, sometimes, that is not the best option for the buyer.  

I am sure that Uncle Bobby is a great guy and has been in the business for a long time.  But, it comes down to does Uncle Bobby's company not have the same loan program at the rates we have as a market-leading wholesale mortgage broker. 

The question that I would have to ask is are you okay with paying more per month on your mortgage?  Are you okay with possibly paying thousands of dollars more over the life of your loan? 

This is most likely your largest investment and largest monthly expense.  So, make sure to get at least two quotes.  Make sure to compare rates and. fees.

The difference between pre-qualification vs pre-approval is the verification process lenders use to determine how much you qualify for.

They may seem interchangeable, but they mean different things.

With a pre-qualification, lenders rely on self-reported information to offer you a quote. It doesn’t typically require them to verify your credit, employment, or financial documentation.

On the other hand, pre-approval involves verifications to approve you for a mortgage loan. Lenders review your credit, verify your employment, and look at financial documentation, like pay stubs, bank statements, and tax returns.

When you’re ready to make an offer on your house, a pre-approval tells the seller that you’re an approved buyer who can afford to buy their home, giving you an edge over non-approved and pre-qualified buyers.

To better understand the difference between pre-qualification and pre-approval, let’s take a closer look at what they involve, what information they require, and the timeframes associated with each.

Yes, you should get pre-approved before looking for a home. No matter the stage you are in, a mortgage pre-approval is the first big step on your path to homeownership.

If you are in the early stages, pre-approvals give you invaluable information to use for budgeting and financial planning leading up to your purchase. This type of planning is especially helpful for renters thinking of breaking a lease to buy a house. If you are looking to buy sooner, your pre-approval will allow you to submit a serious offer once you find a home you love and speed up the mortgage process when you find a home you love.

Let’s look at what a pre-approval is and what it can help you do before looking for a new home.

When you're buying a home, gathering the paperwork for your mortgage before you apply is a must to get the correct amount you will be approved for. Tracking down documents can take time, but doing it will ensure a smooth closing.

Recent pay stubs

W-2 forms from the past two years

If self-employed:  Year-to-date profit and loss statement.  Documents to show unpaid accounts receivable.  

1099 forms from past two years

Bank statements for all your checking and savings accounts

Statements for all investment accounts, including:

    401(k)s

    IRAs

    CDs

Brokerage accounts

Accumulated cash value from life insurance, if applicable

Down payment gift letters, if applicable

Alimony and child support, if applicable

It's possible to look at houses without pre-approval. However, if you’re serious about buying, it’s not recommended. Consult with your lender to determine your budget and monthly mortgage payment. A pre-approval letter will help you during the house-hunting journey and tell sellers you’re a ready-to-purchase home buyer.

Here are top seven reasons:

Tax benefits. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.

Appreciation. Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®.  The recent housing crisis has caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating continued high demand for housing.

Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

Predictability. Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.

Freedom. The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.

Stability. Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.