Friday, July 11, 2014

Prequalifying Helps Determine How Much House You Can Afford

Port Aransas, TX — Before you start your house hunting in earnest, the real estate professional with whom you are working likely will "prequalify" you to determine a price range you can afford. According to the Jannine Osborne, ABR®, prequalification is a necessary part of the home buying process that helps save you time and money.
"Don't be shy or withhold information about your income or credit status. Your lending professional isn't trying to pry. Rather, he or she must know all details related to your ability to obtain a mortgage," Jannine Osborne ABR® of Silver Sands Realty says.

By candidly discussing your financial situation, you'll give the lender the information necessary to show you homes you can afford, Osborne notes. "If you don't open up, you are placing the real estate professional in the role of a tour guide, not someone who can help you find a home within your budget. You'll wind up wasting your time and that of the seller," she says.

Once you have signed a contract to purchase a home, you must choose a lending institution or mortgage company from which to obtain your home loan. Your loan application will request more financial data including your place of employment, assets, and liabilities (including recurring debts such as credit card bills and car payments).

Here are two important tips on loan qualification from Silver Sands Realty 1) Do not borrow the down payment without disclosing the loan, submit fake letters-of-credit or gift letters, or make secret financial arrangements. 2) Accurately list your income and assets, all debts and the approximate amounts you owe.

You'll most likely be charged a credit report fee by the lender, which will cover the cost of having your credit history examined. Credit reporting agencies compile credit reports on consumers, including bill payment history, as well as whether you have been sued or filed for bankruptcy among other information.

Federal credit reporting laws do not give you the right to inspect the actual credit report at the reporting agency or to receive an exact duplicate of the report. But, you are entitled to a summary containing the sources of the report's information. 

If your ability to obtain a mortgage is adversely affected by the credit report, you have the right to challenge its accuracy and seek corrections.

"The credit report is part of the information the lender uses to determine if you qualify for a loan. It is not a mechanism to prevent you from buying. Remember, lenders want to make loans, not turn them down," Osborne says.

Jannine is one of more than 40,000 members of the Real Estate Buyer’s Agent Council (REBAC) of the NATIONAL ASSOCIATION OF REALTORS®, who have attained the Accredited Buyer’s Representative (ABR®) designation. As the world's largest association of real estate professionals focusing specifically on representing the real estate buyer, REBAC is "The Voice for Buyer Representation," with more than 40,000 active real estate professional members of the organization throughout the world.  To receive a free copy of the REBAC-published “Homebuyer’s Toolkit call Jannine at (361)688-0067.