Tuesday, July 19, 2011

Pre-Approved, Pre-Qualified....what?

Do I need to be pre-approved. pre-qualified or pre-nuptualed? Well, I can't give you advice on what you should do when you get married but I am here to tell you about the house you will be buying and how to go about doing it. There was a day, not too long ago, when we could go out looking for houses, find the perfect one, and put an offer on it. Some of us would have hopefully been pre-approved for the loan for the house and others had simply gone over our basic finances with a loan broker and we were given a ballpark of what we could afford. Well, those days are over.
The most important thing we can do for ourselves today is get a clear and precise understanding of our finances and what we can afford. It is no longer as simple as how much we make minus what we pay in bills. Today a loan broker may want to see your income history in bank statements, proof of where your down payment came from and how long you've had it and, of course, your credit history is more important today than ever. Some people may have children with a partner they are no longer with and instead of the typical child support, they are having their ex pay for rent or mortgage where they live. Other people may have received a down from a family member but still need to show the transaction transfer and proof of relations to the person who gave it to them. There are a million and one different financial situations that people have and it's not as simple as it was in the past to get a loan. Banks are being very careful to qualify potential buyers today after what happened with the financial crash we all witnessed. Some people may need to be credit-approved which is just an in depth and much more informative understanding of one's finances. This is typically done when we don't have a straight forward, easy to read, income or perhaps debt.
All that being said, the one thing you need to know about pre-approval and pre-qualification is that you need it. In order to make an offer on a home, this is something that, today, is necessary. When you start looking for properties, don't get yourself into a pickle by finding something that is great for you, but loosing it to someone else who is already pre-qualified gets their offer in and accepted. The early bird gets the worm. That is not the only reason is it necessary to get pre-qualified but also, we may think we can afford more than we truly can and we can only learn that when we are pre-qualified. So, call a friend and see if they have a loan broker they recommend, and ask your real estate agent for a recommendation as well. They call a few different brokers, see who you feel comfortable with, and start your engine cause now we can go look for some houses and you will be well on your way to finding your new home.