10 Steps To Home Ownership – Step 3

Posted on January 16, 2011 by JA/LEX Real Estate in Shippensburg homes for sale Shippensburg real estate

10 Steps to Home Ownership
Step 3 – Get a Loan Pre-Approval
Brought to you by: JALEX Real Estate Services

Few people can buy a home for cash. According to the National Association of REALTORS® (NAR), more then nine out of 10 buyers finance their purchase, which means that virtually all buyers, especially first-time purchasers, required a loan.

The real issue with real estate financing is not getting a loan.  Instead, the idea is to get the loan that’s right for you, the mortgage with the lowest cost and best terms.
REALTORS® routinely suggest that consumers start the mortgage process well before bidding on a home. By meeting with lenders, either online or face to face, and looking at loan options, you will find which programs best meet your needs and how much you can afford.
JALEX agents also recommend pre approvals for another reason, purchase forms often require buyers to apply for financing within a given time period, in many cases, seven to 10 days. By meeting with loan officers in advance and identifying mortgage programs, it won’t be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option.

So what is it?

“Pre-approval” means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.
Although not a final loan commitment, the pre approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

How do you get pre-approval?

Real estate financing is available from numerous sources.  At JALEX we can suggest several local and area lenders to work with that we have experience working with.  You can be assured that our contacts are the best in the industry, because we are Shippensburg’s best, we only work with the best! 
The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs. For instance, a first-time buyer may qualify for state-backed mortgage programs with little money down and low interest rates, while a repeat purchaser (someone who has bought a home before) with more equity (money invested in the home) might want to get a 15-year loan and the lower overall interest costs it represents. Typically, first-time buyers opt for the traditional 30-year loan, with either a floating interest rate or a fixed rate of interest over the life of the loan.
Our team of Shippensburg real estate professionals can help you through every step of the home buying process.  Obtaining a mortgage pre-approval is one of those steps and we are ready to answer your questions and provide you with the best service! 

Give us a call at 717-477-9326 for help buying your Shippensburg home.