Don't want to get too technical here...a "prequal" letter simply tells an agent you have talked with a lender and based on your credit report and what you said your income level is, they'll write a letter prequalifying you for a certain amount. That letter is not a guarantee of a loan- period. However, you need to have this letter in order to present an offer on a home. Plus, you need to either place with your agent's office what is called "Earnest Money Deposit" or EMD. This shows the agent representing the seller (listing agent) and the agent representing you (selling agent) you are serious about making this offer come true. The EMD counts against your closing costs (see below).
Signing a Buyer/Broker Agreement ties you to that specific Broker- regardless. In essence, you are committing to that agent's broker (the "selling" agency) that they'll get paid regardless of who shows you the home, no matter who, how, or when. If you've signed one, you either need to cancel or commit to letting that agent/broker do their job and find your new home.
When it comes to mortgages, remember this- You have a lifestyle (clothes, date nights, movies, clubbing, whatever). You should consider how much your lifestyle is paid from your income and then budget for your home, and maintain your lifestyle (or way of living). A really good REALTOR will always consider your lifestyle into the equation...we want you living a good life and being a homeowner- not working your bottom off to be a homeowner...Find a good, honest REALTOR who will work hard to protect you from the pitfalls of home buying- it can be daunting. Also, learn as much as possible about mortgages, invest the time in it because the most perplexing part about buying a home is in the details- and mortgages are all about the details. Sometimes you'll think; "Why do they need to know that?". The answer is because it is in the rules of lending, always has been, hasn't really changed all that much- lenders were allowed to get a little less diligent before 2007.
PS- You're going to need 3.5% (roughly) of the purchase price to pay for expenses. On a home that goes for $100,000 that's $3500, plus the appraisal and home inspection (the last 2 are not in the percentage quoted) but your EMD does. Many agents say to get the seller to contribute $$ helping you cut costs, but don't count on the seller agreeing. Right now, its considered to be a "seller's market" (low inventory drives up sales prices- part of supply and demand). A "buyer's market" is when there are many homes for sale and not enough buyers (high inventory can drive prices down- again, supply and demand).
Remember, its real estate- anything can happen (and it usually does!)
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