One important and exciting life experience is purchasing a home. However, when it is the first time to buy a home, one is faced with a lot of decisions to be made, and at the same time has numerous questions which require to be answered. Thus, it is important that before one makes this important purchase, one should have basic knowledge regarding the processes of buying a home. This study paper provides some basic information for first time home buyers.
The information provided will include prequalification and pre-approval, choosing a mortgage, mortgage tips and mortgage mistakes that a first time home buyer should avoid at all costs. The objective of this information is to create a better understanding of mortgage process for those first time home buyers. Approval: pre-qualification and pre-approval A lot of people use the phrases pre-qualification and pre-approval in an interchangeable manner. Though, both terms offer some suggestion of if or not a prospective home buyer can acquire a mortgage for a particular amount, the two terms have a noteworthy variations between them.
Consequently, it is vital that a prospective home buyer should understand them. (Sid, 2004) Mortgage pre-qualification Mortgage pre-qualification generally is a view by a lender about a borrower, which is given as a certificate or a letter, which states that the lender trusts that a prospective borrower is capable of qualifying to get a loan. The lender uses credit, income, employment, debt as well as asset which the prospective borrower provides as a basis of his view or trust.
At times, the lender might through permission of the prospective borrower, obtain the credit report of the borrower. (Citydowninfor. com, 2007) Mortgage pre-approval On contra, pre-approval is a lot more thorough procedure. When using pre-approval the above information (Mortgage pre-qualification) is given, however, this information is then confirmed. Disclaimers found on a pre-approval form are usually subject to adequate property evaluation and no substantial variations in the borrower’s monetary status.
The pre-approval form may also indicate the kind of a loan and a specific rate and period a person is pre-approved to get. Whereas, a pre-approval is not an assurance for obtaining a loan, it gives the home buyer better chances of obtaining a loan than pre-qualification. (Citydowninfor. com, 2007) Choosing a Mortgage It is important that the prospective home buyer chooses the right mortgage. A mortgage is the loan a home buyer takes in order to finance his/her buying of the home. And it is repayable monthly.
Mortgage rates are an important element which one has to evaluate before selecting the mortgage. When choosing a mortgage it is extremely vital that one chooses the best plan to fit well with his/her specific situation, this can be achieved through reaching. (Citydowninfor. com, 2007) The internet can offer the best source to carry out your research, which will include getting information regarding mortgage process, available lenders, how much you can borrow, the price range and tax savings you can make which are connecting with owning a home.
(Citydowninfor. com, 2007) Application for a mortgage In the past it took a lot of paperwork and time before one could know if he/she has been considered for a mortgage. However, currently, a lot of lenders have gone online and one can easily apply for a mortgage online. With the latest technology it is even possible to electronically sign your mortgage papers. Finding reputable mortgage banker It is important also that you chose a reputable mortgage banker when applying for your mortgage.
Whether you decide to use a mortgage banker or credit unions or any other lenders, it is important that you chose a well reputed mortgage company. Given that, there are numerous mortgage firms, choosing a mortgage firm can be a tricky issue. Get recommendations from friends as well as friends. (Sid, 2004) Mortgage Tips The following mortgage tips will make you be able to control different aspects of house buying. If you put them in mind, then you will probably be capable of monitoring the home buying process. (Robert, 2003)