First step to take in buying a home is to get pre-qualified for a loan...

 

Getting Pre-Qualified for a Mortgage Loan...

This step helps both you and your lender learn just how much home you can afford. And you should begin this process before you even start looking for a home.

A lot of first time home buyers use FHA loans.  Usually FHA loans are easier to obtain than Conventional Loans.  FHA loans usually require 3.5% down opposed to conventional loans that usually require 10-20% down.

According to the Federal Housing Administration (FHA), their pre-qualification essentials include:

- Having a steady employment history, covering at least 1 year.
- Consistent or increasing income over the past 1 year..
- Credit report reflecting a good repayment history with creditors, usually a credit score of 620 or better.
- Any bankruptcy must have been discharged at least two years prior (one year for a Chapter 13), with good credit since the discharge.
- Any foreclosure must have been completed at least three years prior, with good credit since the completion of the foreclosure.
- Mortgage payment – including taxes, homeowners insurance, mortgage insurance, and HOA dues (if applicable) should be no more than approximately 30% of your total gross monthly income.
- Total monthly debt payments should not exceed approximately 45% of total gross income.
- To determine pre-qualification, mortgage lenders will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.

Why is pre-qualification important?

Pre-qualification for a home loan typically costs you nothing, but gives you a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a down payment.

During the pre-qualification process, you will be expected to provide the following information:

- Your gross monthly income
- Your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)

Ready to find out where you stand?

A good place to start is with your bank.  Most banks offer Mortgage loans and since you already bank with them my give special consideration to your loan application, especially if you have direct deposit with that bank.

Another place to check into mortgage loans is an internet search.  You will receive many options including mortgage loan companies that allow you to apply online.

or if you are in the Northern California area, Contact me.  I work closely with an excellent loan officer.

We can work together to find out how much you qualify for.

Once you know how much you qualify for, get your pre-approval letter to your Real estate agent or Realtor and you can start searching for homes for sale in your price range!