Why Is It Important For Buyers To Get Pre-Approved First?/ Common First Time Homebuyer Mistakes

Buyers often wonder WHY they need to get pre-approved for a home loan and here are my top four reasons:

1. Not all Buyers qualify for a home loan, or they may be approved for a much smaller amount than anticipated.   I've had clients come to me and say I can afford X amount a month and according to the mortgage calculator online I can spend X amount on my purchase. Unfortunately what you can afford and what your lender will loan you are two different stories.

2. To make sure you how much home you can afford.   When getting pre-approved by a lender they will not only go over which loan programs you qualify for, but they will also give you an estimated monthly mortgage payment and closing costs based on your approved loan amount. With this information you can then decide how much of a home you can afford.

3. The Seller wants to see proof.   A majority of sellers in today's real estate market won't even entertain offers that are not accompanied by a Pre-Approval Letter or, if paying cash, Proof of Funds. By providing a pre-approval letter with your offer the seller will know you are not only a serious buyer, but a ready, willing and able one.

4. You need to know the terms of your offer.   When writing an offer you must know the terms you will be offering; the loan program you are choosing, how fast you or your lender can close along with whether or not you need/want seller contributions. Say your estimate for closing costs is around $10,000, but after your down payment you only have $3,000 left to spare. That means you will need to ask the seller to contribute $7,000 towards your closing costs in order to have enough to purchase their home. Seller contributions are not negotiated after you are under contract on a home, this is done during negotiations.


Looking at homes prior to getting pre-approved for a home loan is like putting "the cart before the horse." There are several steps to the home buying process and this is why you need to have a good Realtor.  When you need assistance, Give me a Call...

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Foreclosure Resource Guide - Buying A Home Again After A Foreclosure?

Last week we discussed how foreclosures are still on the rise, the affects on the community and how a Short Sale can be an alternative for a homeowner.  But what about those who have been through a Foreclosure?   When can they buy a home again?


Your credit score will take a major hit after a foreclosure, but there are guidelines to follow when you're ready to be a homeowner again.  If credit is reestablished after the foreclosure, and depending on the type of loan you will use to buy your next home, it can take between 3 - 7 years to be accepted for a home loan.  In the link below, you will find a chart which will outline the present standards set by FHA, Freddie Mac and Fannie Mae for the wait time on these loan types for those who have gone through Foreclosure, a Short Sale, or Bankruptcy.  With discipline and perseverance, you can again be in a position to obtain a home loan. The next link below will give you a 5 step guideline on how to reestablish your credit and become a homeowner again.

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  (New!)

  When is Foreclosure Removed from Your Credit Report?

  Use this handy guide to figure out how quickly you can buy a home after a major financial setback when applying for a loan through FHA, Fannie Mae, or Freddie Mac. Read
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  5 Steps to Owning a Home Again After Foreclosure

  Foreclosure is just a one-time event—with discipline and perseverance, you can get a mortgage and become a homeowner again. Read

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