How to Prequalify for a Mortgage?

Ask us for a list of reliable mortgage bankers or brokers. We can visit with you about the huge array of loan programs available. They are many varieties of programs that constantly change primarily based on location of house.

Mortgages loan programs are typically Conventional, FHA or  VA. However, there are special programs and new programs every day.  A few are: Interest Only Mortgages, Adjustable-Rate Mortgage, Fixed- Rate, Bridge loans, reverse mortgage, equity mortgage, 203K Rehab loans.

For example, currently some homes in Texas qualify for a USDA loan, there are income limitations, and however you can purchase a home with little to no money down! FHA sales price guidelines also change based on counties.

 As real estate consultants we stay abreast on all available loan programs so we can guide you to a mortgage broker or banker that suites your needs.

Once you have found a mortgage broker that you are comfortable with, they are going to ask you for specific information regarding your financial statements. Recent pay statements will be needed to allow for the broker to calculate your gross income on a monthly basis. All debts that you currently are paying on a monthly basis will have to be documented and provided to the broker. These debts usually include any credit cards that you currently are in possession of, car payments, school loans and or medical bills.

The mortgage broker working your case will then tally up all of your debts on a monthly basis in comparison to your income and come up with a ratio. This ratio is going to play an enormous part in you being able to pre-qualify for a home loan.

Credit scores will then be checked on all parties looking to apply for the loan. A credit score determines how much risk is involved for the lending institution if they loan you the money needed. There are a lot of situations that go into determining your credit score, such as your age and how long you have had credit to your stability in your occupation. Anything above 620 on your credit score will have you going in the right direction towards pre-qualification.

VA and FHA Tips

If you are obtaining a VA or FHA loan in order to finance your purchase, make sure to include that information in your offer, because government loans require additional performance by the seller.FHA and VA Loans

VA and FHA loans prohibit buyers from paying certain types of fees that are often charged by lenders, escrow companies, settlement agents and title companies. They are called “non-allowable” fees, which mostly come from your lender. After you are pre-qualified by a loan officer, you and your Realtor can ask how much the lender’s non-allowable fees will be.

Home appraisal inspections on FHA and VA loans are a little more detailed than on conventional loans (and more expensive). The appraisers are required to perform certain minimum inspections as well as evaluate the market value of the property. Although these inspections are not as detailed as a professional home inspection and should not be considered a substitute, sometimes repairs are required.

These are additional costs the seller would not be obligated to pay for someone obtaining conventional financing, so your offer should include a maximum figure for these repairs.

Seller Financing

Another occasional request is to have the seller “carry back” a second mortgage to help facilitate your purchase of their home. In cases when the seller does not need all the proceeds from their sale in order to purchase their next home, this is an option. The advantage to the buyer is that by combining your down payment and the second mortgage from the seller, you may be able to avoid paying mortgage insurance.

If such a carry-back is part of your offer, you should include the terms you wish to pay on such a second mortgage. Keep in mind that your first trust deed lender needs to know this information so they can underwrite your loan, and they have certain minimum requirements. The minimum term of the second mortgage can be 5 years. The minimum payment can be “interest only.” Longer mortgage terms and payments that also include principle are also acceptable.