The First Step In Buying A Home: Financing

Determining how much you can afford before you begin your home search will save you valuable time.

Pre-qualification vs. Pre-approval

• Pre-qualifying for a mortgage generally helps you determine how much house you can afford.
• Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income
• Remember, becoming pre-qualified does not necessarily mean that you will be approved for a loan of that amount
• Pre-approval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount
• Having pre-approval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home

• Most lenders require a 5 to 20 percent down payment; 25 percent or higher down payment may qualify you for a lower percentage rate. I can help you locate a lender who will assist you in finding a financing package that best meets your needs.