Home Buying

Qualifying to Buy

Qualifying For A Loan  There’s a lot of talk about home loan pre-qualification by mortgage brokers and real estate agents. There is a difference between loan pre-qualification and pre-approval. Pre-qualification, which in today’s marketplace is usually done by mortgage brokers, means working with the buyer to determine how much they can afford and which loans are the most likely to be available to them. Loan pre-qualification can save a buyer time and money, and can even be a bargaining tool with a seller, however, it is not the same as loan “pre-approval”. The mortgage broker can often get the buyer a pre-qualification letter. Pre-approval means that the lender has definitely committed to lending the buyer money once the house itself is approved. Since it is a much stronger pledge, it is a much more valuable negotiating tool. Only a lender can give pre-approval, but your Realtor may be able to push through pre-approval from underwriters with as little as a phone call. So when you hear someone talking about “pre-approval” make sure that it is lender pre-approval.

Mortgage Myths  Nationwide surveys indicate that a large number of potential home buyers count themselves out of the market because of widely-held myths about home financing. Some of the most popular myths include: 1) home buyers need large down payments (more than is actually the case); 2) the loan process works against people under age 35; 3) owning a home is more expensive than renting; and 4) minorities have no chance of getting a mortgage. Many qualified first-time buyers were unaware of special programs designed especially to make a home affordable to them. The surveys found that many people view the mortgage process as “difficult, stressful, and incomprehensible.” The home loan industry is always looking for new ways to dispel these myths because lenders want more business, not less. The alternatives to traditional 20% down, thirty-year fixed mortgages is astonishing. Mortgage brokers are experienced in explaining today’s financing and debunking the myths.

Qualifying Guidelines   You have found the perfect home in the Luling area, but finding the perfect financing has become elusive. After you completed the application process, your lender has turned you down, and you are upset. Can anything be done to turn around this setback? It depends on why you were turned down. If your income is too low to satisfy one mortgage company, there might be another company with more liberal qualifying guidelines. If you have had credit problems, some lenders may be more willing than others to help you clear them up in a manner that satisfies their underwriters. If your loan runs into problems, sit down with the loan officer and your Realtor to investigate the possibility of using a different lender. The first company may be able to “assign” the package to a competitor, enabling you to use your same credit report and appraisal. You will need the cooperation of your sellers, too. While loan rejections are disappointing, they can have happy endings.