One of the most important pieces of advice that I give to a buyer is to get a pre-qualification letter before they begin hunting for a new home. This may seem like a backwards way to go about the home buying process, but I feel that it's a necessary step. As a buyer, it is important to know your price range specifically before searching for a new home. It would be very frustrating to find the home of your dreams and come realize later that it is just out of your reach financially. Getting pre-qualified will help you set your price range and you will know before you even look at a house whether or not you'll be able to afford it.
Secondly, a prequalification letter can give you an idea of the monthly payments you will be making. There's no reason to end up "house poor" when you can make your decisions and do your math long before you ever put your name on a contract.
Finally, and perhaps most important of all, a prequalification letter will show the seller and the seller's agent that, without a doubt, you can qualify for their home. Even in today's market, a seller usually won't sign a contract with you until they firmly believe that you can qualify for a loan.
A prequalification letter is easy enough to obtain. Just call your bank, credit union, or your favorite lender. The basic information that you would generally need to provide for prequalification are as follows:
- Legal name & Address (for last 2 years)
- Date of Birth
- Social Security #
- Employment History for last 2 years (including monthly income)
- Checking/Savings Account #'s & Balances
- Desired Monthly Payment
- Down Payment Amount
They can take your information over the phone and will usually have the letter to you within a few hours.
Before you go out looking for your dream home, don't forget this important step! If you have any questions about getting pre-qualified, buying a home, or about the Orlando and Central Florida real estate market in general, please feel free to contact me or email me directly. You can also call or text me at (407) 421-1052!
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