Having loan pre-approval from a lender means you are eligible to buy a home or condo in a certain price range.
Get started by compiling your W-2s or 1099s, pay stubs, tax returns, bank statements and monthly expenses. A lender-generated credit report will also be part of your loan package.
A lender will guide you through the steps and show you what kind of loans there are and how the amount of down payment affects what type of loan works best for you.
Your monthly payments and any required mortgage insurance will be influenced by how much you put down. If you know what your loan and associated fees will cost you, you will be better prepared for closing.
Getting pre-approved will help you refine what kind of property best fits your monthly budget. The lender will factor in all the monthly costs of owning a home and see if the debt-to-income ratio qualifies you to buy.
If you are thinking about a condo, be aware that condo association dues will increase your monthly housing debt, possibly making a single-family home more affordable.
Different loan products have different costs, which can affect the amount of total funds you will need to close a sale. Origination fees vary the most and are usually a percentage of the loan amount. Your lender can create different scenarios to see what works best for you.
There are easy-to-understand worksheets for the pre-approval process. Call me for an appointment and we can go over all these steps and prepare you for your next home purchase.