5 Benefits Of Being Pre-Approved

5 Benefits Of Being Pre-Approved

By far the biggest mistake I see first time buyers make is not being pre-approved for a mortgage.  Often it is because they don’t know the steps or maybe are just wanting to see what the market is like.  Whatever the reason if you are serious about buying a home I strongly recommend you get pre-approved for a mortgage.

Here are 5 benefits of getting pre-approved:

1. Loan Options - Knowing what type of options you have as far as loans are concerned is important.  This includes knowing how much your monthly payments are, down payment requirements and what type of terms to expect.
2. Credit - Having your credit pulled and reviewed by a loan officer is very important.  This will give you an idea of where you stand on credit and possibly any issues as well that you can address.
3. Budget - Knowing how much you can borrow is very important.  Don’t forget the lender will give you an amount, usually a maximum amount you can borrow, keep in mind what you want to borrow.  You may not feel comfortable maxing out your credit, this is a good time to figure out what you feel comfortable with as far as getting a loan.
4. Creditability - If you are pre-approved for a mortgage the sellers and listing agents will actually take your seriously.  What good is an offer if you are not approved for a loan?  So be sure to get pre-approved, it will go a long way.
5. Start Viewing Homes - This gives you the ability to actually start looking at homes with confidence.  Many sellers and listing agents won’t let you view a home if you are not approved.  Having that approval on hand will let them know you are serious buyer.

Getting pre-approved has it’s advantages, something you can do easily and get so much benefit as well.  Be sure to take the time to do this step as it will pay off greatly when you decide to start your home buying process.

With a heart of a teacher I look to educate my clients about the process of buying, selling or renting real estate.  I strongly feel an informed and educated consumer will make better decisions and be less likely to be taken advantage of.

Have questions about this or other topics, don not hesitate to contact me.

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Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

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Just Say No!!! | Luis Cuevas Realtor® RE/MAX Cross Country

Just say no!  What do I mean by this?  When you are in the home buying process whether you are just starting or already under contract I often have to tell buyers their new favorite word should be “NO.”  

When you first get approved for a mortgage the lender takes a snap shot of your credit.  That snapshot is what they use to determine if you will be approved for a mortgage.  You have to keep in mind that it is a snap shot in time and we all know things can change over time, which is why I recommend buyers not change their credit from when they got approved.

What that means is no more new debt, credit cards, payment obligations, lines of credit or store cards, and especially no new cards.  You have to remember the lender will be checking your credit through out your transaction and can do it up until the day of closing, not only credit but employment.  If any of those things change then it can jeopardize your ability to qualify for a home loan.

Which brings me back to just saying “NO” to new lines of credit, car loans or anything that would change your credit.  

So remember just say no!

As you can tell I love to educate my clients about the process and any topics around real estate.  With the heart of a teacher I strongly believe it is important to educate my clients because it will empower them to make educated decisions and be less likely to be taken advantage of.

Don’t forget to give this video a “LIKE” and be sure to “SUBSCRIBE” to my channel!

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome

5 Types Of Morgages

There are many ways to finance a home, let’s cover some of the more popular types of loan products.   Home financing options can get a bit confusing with all the terms and types of loans, each with their different requirements.  Let’s break down these different types of loans in a simple easy to understand format.  I will cover some of the more popular types of loans I see used to finance a primary residence.

Remember we won’t cover rent to own, owner finance, hard money loans and other types of financing.  While those types of financing options do exists it is generally is not very common.

These are just some of the basics for the different types of loans.

FHA - One of the most popular loans for low credit and down payment requirements

- Insured by the Federal Housing Administration

- Minimum down payment as low as 3.5%

- Minimum credit scores of 580

- 2 Mortgage Insurance Premiums

-Paid up front or financed in mortgage (1.75% of loan)

- Monthly Mortgage Insurance Premium (Based on several factors- .80-1.05%)

- This is probably one of the most popular due low to credit and down payment requirements.

Conventional - Offer better financing options however has stronger qualifying requirements

- Privately insured (not backed by government but private investors)

- Minimum down payment as low as 3-5%

- Higher credit score requirements than FHA

- Private Mortgage Insurance charged if less than 20% down payment

- Typically .5%-1% of the loan amount on an annual basis paid monthly

Ex: 100,000 loan - $1,000 per year - $83.33 per month

- Popular for those with higher credit & down payments

VA - Veteran requirement - low credit & even 0% down

- No mortgage insurance however it has a funding fee

- Funding Fee - ranges from 1.25%-3.3% (can be financed)

- Low credit score ok

- 0% down payment option available

USDA - 0% Down Payment Option

- Income eligibility 

- Property eligibility (www.usdapropertycheck.com)

- Credit Score low to middle 600’s

Jumbo Loans - Higher Price Point loan amount above conventional conforming loan limits

- Roughly $453,000 minimum loan

- Higher credit requirements - Middle 600’s & up - depending on down payment

- Higher interest due to higher risk loan

- Down Payment as low as 5% but typically higher

Keep in mind, we only covered the basics, we did not cover additional items such as:

• • • Debt to income ratios
    • Income requirements
    • Income Calculations
    • Self Employed vs Employed
    • Time on the job
    • Escrow options (Escrow or No Escrow)
    • Property Requirement - condition
    • Max Loan To Value %

As you can see there are different types of loans for different situations to suite you best.  From my experience these loan requirements can change on a regular basis and can be difficult to keep up with which I why I strongly recommend the loan officers that I work with.  They stay on top of these loans, are up to date and also know the ins and outs of loans to see which ones fit your need.  With so many variables to consider beyond credit and down payment I leave it up to the pros to assess your situation and present to you all your options. 

I hope this helped you breakdown the different loans and at least to know some more of the terms you hear all the time when it comes to mortgages.  If I can be of assistance or you have any further questions please do not hesitate to contact me.

 Again I hope this was of value and maybe you picked up a tip or two.  My goal is always to be a resource and educate my clients so they can make informed & educated decisions.

Have questions about this or other topics, don not hesitate to contact me.

Luis Cuevas, Realtor®

RE/MAX Cross Country

1990 Justin Road

Highland Village, Texas 75077

(214) 783-0535

Luis@MakeNorthTexasHome.com

Check out my website for more helpful tips:

http://MakeNorthTexasHome.com

Subscribe to my YouTube Channel:

http://Youtube.com/MakeNorthTexasHome

Follow me on Facebook:

http://Facebook.com/MakeNorthTexasHome