By Jessica Russell-Carter
Realtor

Before you ever start looking for your new home, you should consider the best way to speed your purchase process – become pre-approved for your mortgage loan!

To become pre-approved for your mortgage loan means that you will eliminate the process of looking at houses that you can not afford. It also means that your real estate agent will treat you with a heightened level of seriousness. He or she will be able to take your approval amount and search for homes in your price range. Getting a pre-approval helps cut down on looking at homes that are above the pre-approval range which can lead to disappointment.

To start the pre-approval process you should contact a local mortgage lender. Using a local mortgage lender can also speed the settlement process because local lenders will be more aware of local mortgage requirements better that other lenders who are not in your immediate area. I would suggest talking to a local lender even before saving money towards a down payment because you will know how much to save. The lender can even advise you as to which debt to pay off, if you can buy now or how long you need to wait.

Once you have your pre-approval process completed, every prospective seller will see you as a serious prospective buyer with no need to wait for you to get financing arranged to purchase his or her property. Another benefit of having the pre-approval in place is that you will tend to not loose a purchase deal to another prospective buyer interested in the same house.

It should be mentioned that if you do not get pre-approval lending, you should not abandon your house-hunting hopes. Instead, you should find out from your lender what you will need to do in order to get your finances in order so you can buy. You may need credit repair, additional income, a longer employment history or even income stability. Whatever the case might be, follow your lender’s guidance, consult with a financial adviser, enroll in credit counseling and work towards your goals.

Every lender wants to see you as a home owner and see that you are taking the steps to get there. Many realtors have a list of clients who cannot buy their home today but are working towards buying tomorrow. The important thing is to stay encouraged and to keep moving ahead towards the goal of home ownership.

The important factors needed to be known in order to obtain a pre-approval are:

Income – Income comes from employment or sources of income. Besides that the lender looks at income stability. Keep in mind these things will be verified during the underwriting process.

Debt to income ratio – This is how much debt compared to the amount of income you have. The debt mentioned here is credit debt. It is not utility bill, such as gasoline for your car or your grocery bill. Renters, not be currently paying all utilities, need to take this into consideration.

Credit – Your credit score is another factor that lenders evaluate. High scores help, but you can buy a home if you have a low score. Most lenders are looking for a score of 640 or more. Many lenders will work with scores of 580-640, however in those situations debt-to-income ratios play a bigger roll. You need to have some revolving credit. But you want to make sure it is appropriate for your personal financial circumstances.

To contact Jessica Russell-Carter you call her at 412-626-2334 or e-mail her at JessicaRussell@Remax.net