Pre-qualification is one of the smartest things you can do to help your home buying process run smoothly. Why?
Getting pre-qualified is quick, easy and free…and it gives you an estimate in advance of what loan amount you will be able to borrow and determine the loan type that’s right for you. Pre-qualification can even be done online. The lender will review your finances and estimate the amount of loan for which you may qualify. This pre-qualification is not guaranteed or considered to be any type of loan commitment…it’s simply a tool for you to know your borrowing power.
In addition, loan guarantees are offered on a variety of government sponsored mortgage programs and enable mortgage lenders to provide USDA mortgages. What is a USDA home loan? Well, this type of loan assists borrowers who would not traditionally be able to get approved. This loan means zero money down allowing financing up to 100% of the home’s value. USDA loans also provide very competitive fixed interest rates (never an adjustable rate mortgage) and affordable 30-year loan terms. This fixed rate guarantees that your monthly mortgage payments will never increase with a USDA home loan. The only fee associated the USDA rural housing program is a small, one-time funding fee.
So, all this being said, pre-qualification before you shop allows you to budget early on, set your expectations on what you can afford…and what you might need to get out of your current home if you’re selling too. Once you create your budget and know about how much of a monthly house payment you can comfortably afford, your new home search will be more efficient. Knowing which homes are in your price range and the loan type you will need will save you time and allow your home buying expectations to be met.
If you’re in the search for a new home, I would love to help you! Contact me to get started today. I can help you not only sell your current home, but get you and your family into the home you desire!