Wake Forest Homes & Real Estate

First Time Homebuyer's Section 2 - Getting Pre-Approved for a Mortgage

tripp@aliceray.com (Tripp) — Mon, 11 May 2009 19:57:56 GMT

How to Get Pre-Approved for a Mortgage

Pre-approval is an important first step in the home buying process, especially for the first time home buyer. Many people will start off looking for homes online and getting figured out exactly what you want only to find out later that you may or may not be able to afford what you are looking at. Once your expectations are set so high it is difficult to adjust to homes that are available in your price range. Finding out first home much home you can afford will put you in a much better position and save you a lot of time.

One note I want to point out at this time is just because a lender approves you for a $300,000 home, doesn’t necessarily mean you shouldn’t consider homes less than that. One big mistake that many people have taken in the past is they buy as much home as they can and they struggle to make all of the payments every month and therefore have to cut back on savings and everyday luxuries and necessities that they are used to. Always leave yourself some wiggle room and make sure you are comfortable with your payments and are still able to save a little each month.

Now back to getting Pre-approved. Pre-approval is better than getting pre-qualified. A mortgage lender is able to pre-qualify you with limited information, but going ahead and getting pre-approved gives you a leg up when you make an offer on the home you decide on. Pre-approval means the lender has verified many more things and you are essentially approved for the loan with minimum conditions left to meet. Your offer will look stronger with a pre-approval letter.

Here are the steps and the necessary information and paperwork a mortgage lender will ask you for:

1. Choosing a Lender

First thing you need to do is get in touch with a mortgage lender. Many people’s first option is their current bank or who they have their current home loan with. If you are a first time home buyer you may want to consider a parent’s mortgage lender or a recommendation from a friend who has a mortgage lender they trust. Another good option is to get a few options from a Realtor. Realtors have many lenders that like to earn their business and will generally work hard to make sure a Realtors client they send to them is well taken care of.

2. Loan Application

The Mortgage lender will need you to fill out a loan application. Many lenders now have this available online for you to fill out or can send you one by email. You can also either meet them at their office even talk to them on the phone and they can fill out the information for you. It is usually a simple process that will only take 20 to 30 minutes.

Here are some questions that many lenders applications will ask:

For your street address, e-mail address, phone and Social Security number. If you've lived at your current address for less than three years, the lender will want to know where you lived before that. If you are buying this home with another person or persons, they'll probably want to know your relationship to the co-borrowers.
Whether you currently rent, own or live with family.
How many dependents you have.
Your annual income.
Your occupation, employer and how long you've been employed there. If you've been with the company for less than two years, it will ask where you worked previously.
Your assets -- what you own and what it is worth. This includes your current home and other property, checking and savings accounts, stocks, bonds and retirements accounts.
Your liabilities -- how much you owe, to whom and how much you pay every month.
Whether you have filed for bankruptcy in the last 10 years.
Whether you are behind on any bills.
Whether you are a first-time buyer.
Whether you are buying a home as a residence or rental property or, in the case of a duplex or other multi-family unit, both.

You may not need them immediately but eventually you will need your W2s, pay stubs, bank statements, brokerage statements and more. So it's never too early to start a file and fill it up.

3. Credit Report/Score

With your social security number, full name, and address all of your past financials is complied and rated.

The higher the score the better a 750 score and above your at the top of the list, 680 and above you are in the game but may have hoops to jump through for a better interest rate, below 650 you can still get a mortgage usually at a much higher interest rate.

You may want to consider getting a credit report on your own before speaking with a lender. You are entitled to a yearly free credit report from each of the main three reporting agencies. You can go to www.annualcreditreport.com to get yours. If you are married you would want to get it for you and your spouse. By getting this ahead of time you may be able to find errors that you can work on correcting before you contact a lender. Many lenders can also help you find these errors and advise you as to how to correct them to get where you need to be.

4. Answer Questions and Provide Documentation

Depending on how complicated your finances are you may receive your pre-approval in a couple of hours or it may take days. If you have held the same job for 10 years and have no credit card debt, two car payments, and a simple financial portfolio it may only take an hour, but if you have changed jobs 5 times in the last 5 years, have many credit cards with debt, late payments, etc., it may take as long as a week or two to get pre-approved.

Be ready to provide tax returns, W-2’s, bank statements, etc if the mortgage lender needs it to produce the pre-approval. The quicker you can provide all the documents and information the faster the pre-approval process will go.

In today’s lending market the rules are changing constantly and mortgage lenders are having to request more to get loan approved by the underwriters so do not let the loan process frustrate you if additional questions or requirements come up. This is just a sign that the lending institutions are now researching people better to make sure they are lending as they should so we are able to get out of the current financial mess we are in.

5. Get your Pre-Approval Letter!

Once the lender sends you the pre-approval letter you are ready to provide this to your Realtor and start house hunting! Your Pre-approval letter will usually state what price home you are pre-approved up to and sometime the type of loan program and at what interest rate you are pre-approved for. You may also want to ask how long your pre-approval letter is valid for – typically this can be anywhere from 30 to 90 days. Most lenders will extend the pre-approval once the time runs up but they may require for your credit to be checked one more time before they extend it.

Now you are a qualified buyer and are ready to seriously begin searching for your new home! Once you have reached this step the fun stuff begins. Now you need to make sure you choose the right Realtor to represent you in purchasing your home!

Click here to go to the next section about choosing a Realtor to help represent you!

Click here to go back to the main Blog.

Tax Time - Find out how owning a home can help!

tripp@aliceray.com (Tripp) — Fri, 30 Jan 2009 15:00:44 GMT

Tax Time

Update - Read about the new first time buyer tax credit of $8,000 here that has replaced the $7,500 tax credit talked about in this article.

Are you renting when you would be better off owning a home? Now may be the perfect time to talk with us and your accountant about the benefits of home ownership. Historically low interest rates, best home prices in years, and the tax advantages available are too good to not take advantage. First time home buyer's can even take advantage of a tax credit up to $7,500!

Please call or email us today to advise you on purchasing a home. We can show you every home on the market that is listed with any company. We will be glad to set you up with a home search directly from the MLS system that gives you the same exact information that realtors see - you can't get this from any other search online! Every day homes that match your search will automatically be uploaded to your custom webpage and an email will be sent to let you know to view them. Go here to see an example and to fill out your information to get your search set up today: My Custom Search!

Visit our last two blogs to find out why you need us to buy or sell your next home in the Wake Forest, Rolesville, Raleigh, Youngsville, and surrounding Wake, Franklin, Granville, and Durham County Areas.

I Want You to Buy a Home!

Call Alice at 919-906-5794 or email at alice@aliceray.com!

Mortgage Rates

tripp@aliceray.com (Tripp) — Fri, 23 Jan 2009 15:20:40 GMT

Here are this weekend's latest rates from Michele Zelvis with PrimeLending. Low home prices and low rates!

Loan	Rate	APR

FHA	5.00%	5.082%
Conv 30yr	5.00%	5.019%
USDA	5.00%	5.030%

*Rates are subject to change due to market fluctuations and borrower's eligibility.

Michele Zelvis
Mortgage Planning Specialist

5400 Glenwood Ave, Suite 215
Raleigh, NC 27612

Cell 919.632.2833
Direct 919-334-9017
Fax 866.877.5968

mzelvis@primelending.com

Get Ready - Mortgage Rates are Dropping! Now is the time to be ready to buy a home in the Wake Forest & Raleigh Area!

tripp@aliceray.com (Tripp) — Fri, 05 Dec 2008 17:10:39 GMT

Wow - I spoke with Michele Zelvis today, who is our preferred lender with PrimeLending, and found out that rates have come down to nearly 5.25%! Michele felt that rates could continue to come down and even dip below 5% sometime in January. There is no guarantee that rates will come lower given how volatile the rates have been lately but today's rates are outstanding! The rates and home prices are at such a good place right now that I wish I was in the market for a home myself. If you are looking for a home in Wake Forest or the Raleigh area and are considering putting in an offer you may want to go ahead and commit so that you can lock in with these rates now! So start your Wake Forest home search today!

There has been some talk within the Treasury Department to put together a plan to encourage banks to lend as low as 4.5% to help lift home sales but this plan is still in development. There are several concerns though that might not make this plan to come to realization. One of which is that investors may have little interest in purchasing 3% Treasuries to fund 4.5% mortgages leaving the US Government to buy them and put more Treasury debt on the market. I'll definitely keep you updated if anything develops with the plan though.

If you are interested in speaking with Michele at Prime Lending about the current mortgage rates and financing options please visit this page for her contact information: http://www.aliceray.com/mortgage.aspx.

Here are the latest rates compliments of Michele Zelvis.

Mortgage Interest Rates*

Rates as of Friday, 5th December, 2008:

	Conforming	APR	Payment per $1,000
30-Yr. fixed	5.25%	5.427%	$5.52
Gov. 30-Yr. fixed	5.375%	5.554%	$5.60
USDA	5.375%	5.554%	$5.60
Jumbo 7yr	5.25%	5.427%	$5.52

*Rates are subject to change due to market fluctuations and borrower's eligibility.

"e;All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest."e;-- a Division of National City Bank