So, have you saved 20% of the down payment?
If yes, congratulations! You are finally ready to buy your first house.
However, before you take another step, we suggest getting pre-approved for the loan.
What Is Pre-Approval?
Often, first-time homebuyers are confused between getting pre-qualified and pre-approved. The latter is just a simple estimate that tells you whether you will be able to secure a loan or not. All banks offer this service so that you approach them, fill out an application and apply for the loan.
On the other hand, the latter holds much more value. Getting pre-approved means a lender has checked your credit history and other documents and is ready to give you a certain loan amount.
The lender gives you a pre-approval letter, which you can give to the buyer and show them that you are serious about buying the house and will get the funds to finance the purchase. This pre-approval letter lasts 2 to 3 months, which means you need to make an offer on the house within this time frame.
Before you apply for the pre-approval letter, we suggest that you consult with an Orlando realtor. Your real estate agent will have access to plenty of reliable lenders who will discuss loan options based on your budget.
Moreover, the lender will look at your credit history and give you advice on what you need to do to improve your credit score to get better loan terms. This meeting will help you unearth any problems you might face during the home buying process, the maximum amount you can borrow, and how much you will have to make in monthly payments. You can even use an online mortgage calculator to calculate your payments based on your budget.
Things You Need to Get Pre-Approval
To get pre-approved, you need to submit a couple of documents, which we have mentioned below:
Proof of Income
Your proof of income includes money you earn from your 9 to 5 job, side job, business, and alimony. It shows the lender that you have the means to pay back the loan.
Proof of Assets
Any cash reserves you have must be shown to convince the lender that you have backup to make the monthly payments if you lose your job.
Credit Score
Your credit score decides your loan terms. For example, if your credit score is in the “Good” range, the lender will offer you a low-interest rate because your credit history shows you can handle your expenses.
Employment Verification
A stable income ensures that you won’t make any delays in the monthly payments. You can do this by showing that you are a regular taxpayer.
And this is how you ensure that the home buying process goes smoothly! Do not set your heart on the first Orlando real estate you come across. If the lender does not approve the loan amount that matches the asking price, you will have to pay the rest out of your pocket.
Hence, you need to hire a professional like an Orlando realtor familiar with the local market. This way, you will be able to make an informed decision. To get in touch with one, visit the Megan Dowdy Realty website. For more information and inquiries, talk to a Winter Garden realtor by calling 407-509-9279.
