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Getting Pre-qualified And Pre-Approved Has Benefits
Mary Ellen Vanaken
Mary Ellen was born and raised in Long Island, New York. After graduating from college, she worked on Wall Street for JP Morgan in New York City...
Mary Ellen was born and raised in Long Island, New York. After graduating from college, she worked on Wall Street for JP Morgan in New York City...
Getting Pre-qualified And Pre-Approved Has Benefits
Many buyers apply for a loan and obtain approval before they find the home they want to buy. Why?
Pre-qualifying will help you in the following ways:
1. Generally, interest rates are locked in for a set period of time.
2. You will know in advance exactly what your payments will be on offers you choose to make.
3. You wont' waste time considering homes you cannot afford.
Pre-approval will help you in the following ways:
1. A seller may choose to make concessions if they know that your
financing is secure. You are like a cash buyer, and this may make your
offer more competitive.
2. You can select the best loan package without being under pressure.
How Much Home Can You Afford?
There are three key factors to consider:
1. The downpayment
2. Your ability for a mortgage
3. The closing costs associated with your transaction
Down Payment Requirements
Most loans require a down payment of 3.5% to 5.0% depending on the type and terms of the loan. If you are
able to come up with a 20% to 25% down payment, you may be eligible to take advantage of special fast track programs and possible elimination mortgage insurance.
Closing Costs
You will be required to pay fees for loan processing and other closing costs. These fees must be paid in full at the final settlement, unless you are able to include them in your financing. Typically, total closing costs will range form 2% to 5% of your mortgage loan.
Qualifying for the Mortgage
Most lenders require that your monthly payment range from 25% to 28% of your gross monthly income. Your
mortgage payment to the lender includes the following items:
1. the principal on the loan (P)
2. the interest on the loan (I)
3. property taxes (T)
4. homeowners insurance (I)
Your total PITI and all debts (from installments to revolving charge accounts) should range from 33% to 38% of your gross monthly income.
These key factors determine your ability to secure a home loan:
1. credit report
2. assets
3. income
4. property value
For more information on Financing and Mortgages and Relocating to North Atlanta, Georgia click HERE.
Now that your are ready to purchase your North Atlanta home, contact your North Atlanta Luxury real estate team - The Mary Ellen Vanaken Team of Keller Williams. 5780 Windward Parkway, Suite 100, Alpharetta GA 30005 www.northatlantaluxury.com
Getting Pre-qualified And Pre-Approved Has Benefits