Juli Doty - Real Estate, Real Advice

Finance

Get Pre-Approved for a Loan

It is important to remember that the mortgage amount you qualify for is the maximum.

It is the amount that the lender feels you can afford, but it is not necessarily the amount that you want to or should pay.

• Mistake #1: Choosing the Wrong Mortgage:

  Pay your bills on time. If you have missed payments, get current and stay current.

• Mistake # 2: Let Qualifying Ratios Get Out of Hand

  Lenders that offer loans above standard are selling sub-prime loans. These loans cost more and the costs are reflected in more of what you will learn in mistake number 3.

• Mistake #3: Not Enough Downpayment

  Mortgage insurance, higher rate of interest, prepayments and adjustable rate mortgage will be your punishment.

• Mistake #4: Saying Yes When You Should Say No

  A couple I worked with were losing their home. The interest rate on their adjustable rate mortgage was going up to the point they could no longer pay. I asked them, if they understood when they got the loan that the payments would go up. They replied yes. I asked why they took the loan that they knew would cause them to lose their home and their reply was "it was the only way we could buy it."

• Mistake #5: Saying No When You Should Say Yes

  Quality loan but you have fear. Analyze your situation using common sense. What are you paying for rent? How stable is your employment?

• What's the Differences in Mortgage Prequalification, Preapproval and Final Loan Approval?

  Prequalification is when the lender looks at a basic copy of your credit report and uses the information you supply to determine how much mortgage you can afford based on your income. No information is verified.

  Preapproval occurs when all credit and employment is verified and the mortgage is approved, subject to the appraisal of the property you have chosen to buy.

  Final Loan Approval occurs when the property has been appraised, all documentation is in the hands of the lender and all contingencies have been met.