Getting Preapproved for a Loan

One way to make sure your home purchase goes smoothly is to get preapproved for a loan before you find that house of your dreams. Getting preapproved involves submitting your loan information to a lender for analysis of your qualifications without a specific house in mind. You include all borrower details such as your assets, debts, credit history and employment/income situation. The lender reviews your materials and approves you as a borrower at a specific loan amount, down payment and interest rate.

The preapproval process allows you to deal with any obstacles to obtaining a loan without putting an actual purchase at risk. Preapproval can be critical in today's markets, with high demand and multiple offers for the same home. Most real estate agents and lenders recommend that home buyers get preapproved; in fact, some real estate agents won't accept offers from buyers who have not been preapproved. It pays to plan ahead and make sure you qualify for homes in your price range.

Tips:

• Complete an application for the largest loan and home sale price you think you can afford.
• Since interest rates are variable, set an interest rate that is higher than what you're hoping to ultimately get.

These steps make it more likely that your real estate closing will go smoothly.

Other benefits of preapproval:

• You determine which loan program best fits your needs and which programs you qualify for.
  
• You find out exactly how much you qualify for. It's no fun to come upon your ideal home and then learn that you can't afford it.
  
• Your approximate monthly payment is defined. This will allow you to budget your money before making this large investment.
  
• You can see what the approximate down payment and closing costs will be.
  
• If you are a first-time buyer, you may qualify for a special first-time buyer program, which will allow you to afford more home for your money.

If you'd like to explore getting preapproved for a loan, give Gwen Hoople a call at 510 301 3037. She will talk it over with you by phone, or schedule an appointment with you at your convenience.