Home buyers, whether first or fifth time buyers, sometimes find themselves with a mortgage they can't handle. That situation can lead to foreclosure and a stain on their credit record. This doesn't have to be the case for you, however.
If you're looking for a home, there are a few things you can do before you go house hunting in the Hendersonville real estate market.
Once you've committed yourself to the task of purchasing a home, you need to decide on how much of a mortgage you can afford. Making that decision before you start seriously looking around can help you in the long run.
Settling on a ballpark figure gives you and your realtor a range to work in. It also allows you to save time by focusing your interest on what you can afford.
With a reasonable figure in mind, you need to get prequalified or preapproved for a home loan. (This will give you a more definite price regarding your home choices.) Generally, your real estate agent will recommend a mortgage broker to get you started.
Getting preapproval from a lender is an intensive pursuit. However, once you have a letter from a lender, you have evidence that you're serious about and capable of purchasing a home.
The difference between being approved for a loan and qualified for a loan is fairly straight forward.
For a prequalification, you supply the lender with a few basics. You can do this online or on the phone. You'll need to give information about your finances, such as your household income and debt load. With that information, you can get an estimate of the maximum loan you're eligible for.
To start the preapproval process, you must submit much more specific information. They will ask you for pay stubs, tax records, credit accounts, bank statements and other relevant financial documents. After an extensive analysis, you will receive a figure based on your ability to make reasonable payments. Because the figure is based directly on your finances, agents and sellers are more confident in completing a successful transaction with you.
Generally, realtors in the Hendersonville real estate market can direct you to a mortgage broker they are both familiar and comfortable with. You may elect not to use the recommended lender. You should have several questions lined up for your financing prospects, in this case.
First, know your loan options. You can ask what kind of financing programs they offer. Don't be afraid to ask which one they think suits your situation. They are financial professionals, after all.
The market waits for no one. The last thing you want is to miss your opportunity because you're waiting on funds. Feel free to ask them how long the approval process takes.
Some institutions offer flexible plans while others adhere to much stricter terms. Ask which line items are negotiable and/or if the agreement itself is at all negotiable. Remember, this will be a long-term commitment. Make the most of your arrangements now, before you're locked in.
Understanding interest rates is also a necessity. Find out what the financier's policy is regarding locked in rates. Also, ask about future interest rates, particularly the policy if the rate decreases during the lock-in period.
Finally, you need to know if they charge fees for prepaying on your loan. You don't want to incur any unnecessary expenses or penalties on your loan.
Before you can progress towards closing on your home, there are some preliminary steps. As you're checking Hendersonville real estate for the home of your dreams, be certain you know how much house you can afford. Going in prepared makes everything much easier.
