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FOR ALL YOUR REAL ESTATE NEEDS
2106 Stout Road
Menomonie WI 54751
Phone: 715-235-0635
Fax: 715-235-4461
Toll Free:
888-491-7055
Rassbach@wwt.net
*Menomonie
Real Estate
*Dunn
County Real Estate; Land
*Waterfront
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Mortgage Prequalification and Preapproval
 Why
get prequalified and then preapproved for a mortgage before you begin your
search for a home? Because there are 3 people who will benefit from your
preapproval: You, your Agent, and the seller from whom you eventually buy a
home!
You:
The most important beneficiary, of
course, is you. One of the most common questions we get from users of this site
goes something along the lines of "Please let us know how much house we can
afford." We're stumped! Why? There are simply too many variables--credit
history, income, debt, special mortgage programs and variations in qualifying
guidelines between different mortgage types--to answer that question. The only
sure way of getting the question answered is through prequalification. The
mortgage prequalification step is a relatively simple one, but it is an
important one. It begins the process of formally applying for a mortgage, and it
gives everyone involved--especially you--a clear sense of the direction they
should be headed.
Your Agent:
By knowing what your financial parameters are, your Agent can spend more time
looking for houses that "fit" and less time pursuing dead ends. No matter how
much you might want
a 4000 square foot home for $275,000, if your qualifications say $125,000, your
qualifications say $125,000. When it comes to mortgages, "yes, but" doesn't
carry much weight!
The Seller:
Want to strengthen your bargaining position? Get prequalified. Want your offer
to stand out in a case of multiple offers for the same house? Get prequalified.
Look at it from the seller's perspective. If you had 2 offers on the table for
your house, one from a fully prequalified buyer and the other from an "I'll get
around to that soon" buyer--to which offer would you devote the most attention?
Even if the prequalified buyer's offer was $1000 less, would you take the chance
on the buyer that perhaps may not be qualified? When it comes to a seller
evaluating offers, "a bird in the hand..." definitely applies.
It is important to remember that the amount of mortgage you will 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 pay.
It sometimes is advantageous to be conservative here. For example, if you
qualify for a $100,000 mortgage and you have $15,000 available in cash for down
payment and closing costs, you are qualified to buy homes with a maximum selling
price of $115,000. So as to not push yourself to the limit, you may want to look
at homes that sell in the $100,000 to $110,000 range. Too many buyers simply
rush off to the $115,000 level and some find themselves strapped when it comes
time to purchase necessary items (such as draperies, additional furniture and
lawn and garden tools, for example) or when they forget to factor in increases
in monthly expenses (for example utilities and maintenance and repair costs).
http://www.ourfamilyplace.com/homebuyer/prequal.html
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