Netflix, a cup of coffee, a donut?

Taking the time to understand exactly how much you can afford can save you a lot stress down the road as you search for a new home.  Figure out where all the money that comes in every month goes and I mean every penny, it’ll pay off!  Lenders will need your basic expenses which include all of your debt visible on your credit report but you should include as many expenses as you can.  Add up all the little things like coffee every morning or premium subscriptions or any other buying habits you might have every week.  Once you have this information it will help you determine if you can make some adjustments and focus more on the housing.

Please keep in mind that a qualified mortgage expert is the best resource for helping you prepare.

What’s the difference between a PRE-QUALIFICATION and a PRE-APPROVAL?

PRE-QUALIFICATION is an evaluation of how much a buyer can afford to borrow.  This may be based on income, assets and liabilities information BEFORE completing a loan application.  This information has NOT been verified by the lender.

PRE-APPROVAL is a conditional approval where the buyer, an evaluation of how much a buyer can afford to borrow.  This may be based on income, assets and liabilities.  The lender HAS verified buyer information, usually through a credit report.

These can be a great negotiating tool as it shows the buying power or the buyers ability to buy. In Lee County, sellers usually require a PRE-APPROVAL to accompany any financing offers.

The first step to find out how much you can afford is to complete an honest budget worksheet and try really hard not to leave anything out.  Next step is to get a copy of your credit report.  Everyone is entitled to a free report from the three major credit reporting agencies every year.  Just go to annualcreditreport.com for more information.  Please speak with your qualified lending expert before making any disputes, they may affect your credit score.

LINK FOR FREE CREDIT REPORT

Once you have your credit reports in-hand, verify that all the information: (a) Belongs to you, and (b) is accurate. It’s not uncommon to have credit information on your report that belongs to someone with a similar name; is a relative or even a new spouse to your ex; has lived at your address previously – or in a worst-case scenario, has stolen your identity. Whatever you find that’s wrong on your credit reports – take steps immediately to have them corrected. The website provided earlier can guide you how to do this and advise you of your rights. This is very important and can directly affect your rate and credit limit to purchase your new home.

Source: Posted on June 29, 2015 by

Next, you may want to shop around (I have worksheets available upon request to help you sort out the fees), here are some local and national lenders to get you started:

Financing :
Finance of America (239) 344-3626 – can help you prepare for pre approval.
Guaranteed Rate (239) 415-1250 – Digital Mortgage
Capital One  (855) 900-8886
Quicken Loans

*The information on this page is intended to get you thinking of preparation to qualify for lending, please consult a licensed professional mortgage expert.