Get Pre Qualified for Mortage
Get Pre Qualified for Mortgage before you make an offer to purchase. Getting pre-qualified and having your pre-qualification letter lets sellers know that you are a serious buyer ready to purchase when making your offer. How and when to get prequalified is a question that comes up often. Getting a Mortgage Pre Qualification Letter is easier than you might think.
Income and Debt Ratios
Lenders will have thresholds requiring debt to income ratios. Most often, the loans will need to meet these thresholds for loan approval. We suggest that you contact lenders to get specifics on these ratios in order to determine the price range for purchasing. By knowing what monthly payment you can afford, you are able to determine the price range of the properties to be shopping for, moreover the price range in which the loan will most likely be approved for.
Mortgage Prequalification Credit Score
After you have reviewed your budget and have your numbers correct, then we suggest that you think about your credit score. Higher credit scores will allow you to get better mortgage rates. Payment history, credit usage, and debt to income ratio all affect your credit score. Consider establishing and maintaining a good payment history for six to twelve months. Using only thirty percent of your available credit lines is good to show low credit usage. For example, if you have a credit line of ten thousand and only use three thousand, this shows a good low credit usage.
Each year, you can check your credit score for free. Additionally, there are numerous credit monitoring services in which consumers can pay for services. Consider knowing your credit score before contacting lenders. We suggest not to contact a bunch of lenders and have them all pull your credit scores as this could have a negative impact on your score! Before focusing on how to get pre-qualified for mortgage, we suggest focusing if needed, on improving credit scores to get good mortgage rates.
When to Pre Qualify for Mortgage
Firstly, reach the optimal credit score needed to get your desired mortgage rate. Secondly, make sure you meet the income and debt ratios explained by lenders. When you are ready to purchase within ninety days, then now is the time to consider getting pre-qualified for your mortgage.
Mortgage Pre Qualification Letter
After you have pre-qualified for mortgage, request a mortgage pre-qualification letter from your lender. When you are ready to make an offer on a home, having the letter will let sellers know that you are ready to purchase and are a serious buyer.
After mortgage prequalification, we recommend buyers to consider finding a buyer’s agent. We invite you to contact us regarding buyers agent services available. A buyer’s agent represents the buyer in the real estate transaction. Typically in a real estate transaction, there are two agents, one being the sellers’ agent which represents the seller. The buyers’ agent represents the buyer. When working with real estate agents under the buyers’ agency agreement, agents will ask for a Mortage Pre Qualification Letter. Buyers agents work for the interest of the buyers. A few of the services of the Buyers’ Agent include locating properties to meet the buyers’ needs, researching properties of interest, and negotiating in the contract process.