Getting ready to purchase a new home? If so it is time to get pre qualified to:
1. Determine how much home you can afford
2. Provide to your Realtor to start the home search
3. Attach to your purchase contract to show the Seller that you are qualified
HomeSmart, the largest real estate broker in Arizona reported on teh importance of pre qualification,
"When you begin the search for a new home, there is much preparation involved. The excitement of it can get to you and you want to dive right into the process. Sure, you can look for homes online, have a real estate agent start looking for homes for you and even begin visiting open houses. But, sometimes homes sell very quickly. Especially if they are well-maintained or in a desirable location. You could attend an open house for a home, fall in love, begin dreaming of where you will put furniture and then three other prospective buyers may submit offers that same day on a home.
Home sales can often be complicated and happen very quickly. In order to put yourself in the best position to have your offer accepted, you should be pre-approved for a mortgage loan. The process of getting approved can take some time and if the seller has to wait for your financing to come through, they may decide to go with someone else’s offer while waiting for you. Losing a home you love because you are not pre-approved for a loan, or because you qualify for less than the cost of the home, is a truly heartbreaking and frustrating experience.
When you prepare in advance and get pre-approved for a mortgage loan, your offer will be more desirable and you can be in your dream home sooner. The first step in the process of getting pre-approved for a home loan is to find a mortgage lender or bank that you want to work with. A mortgage lender will discuss what size loan you are looking to acquire, what size loan you will actually get pre-approved for, the different types of loans available to you, and how much of a monthly payment you feel comfortable with. One thing that will play a major role in mortgage loan pre-approval is your credit score. Your credit score will influence how much you are approved for, the interest rate you are approved for and the type of loan you are approved for. It is always wise to check your credit score beforehand and ensure there are no discrepancies. If there are, dispute any discrepancies immediately. Additionally, do whatever you can to improve your credit score before seeking loan pre-approval as this will help you qualify for the best loan possible.
You will be responsible for providing a significant amount of documents to be pre-approved for a loan. You will need to have proof of your income (recent pay stubs or W-2s from previous years work as proof of income) and you will also need proof of assets (bank statements or investment statements). You will need proof of employment as well as documentation of who you are (drivers license or social security card). Once a lender has all of this information, they will give you a number for which you are pre-qualified. While this number is a good representation of how much home you can purchase, it is not the final word on the subject. Once your documents and information have been submitted to an adjuster and considered and calculated, you will receive your loan pre-approval.
Loan pre-approval can take about one week but once you have this, you will be a much more appealing candidate for sellers. With your pre-approval in hand, you can happily and confidently submit an offer on your dream home and wait for it to be accepted."
See more at: http://blog.homesmartinternational.com/how-does-loan-pre-approval-work/#sthash.ZmDFiBhR.dpuf
So, don't wait. It is time to get started. By the way if you have moderate income, ask your lender and/or Realtor for information about free grants that they are aware of and are currently available. For example, right now there is the Home In Five program for FHA, VA loans in Maricopa County offering a grant of 5% of the loan amount. This may be used for down payment and/or closing costs. These grants change, but it well worth asking about when you get pre qualified.
Jeffrey Masich, Realtor, GRI, MBA
Scottsdale, Arizonawww. ArizonaHomesLand.com