How to Get Pre-Approved
As you start to search for Homes in the Sedona Real Estate Market, one thing that really gives you an advantage is getting pre-approved by a lender. This may take some time but will save you money in the end. It helps you know how much of a home you can afford and makes you more attractive to the home seller.
1. Shop around
Take the time to shop the lenders and banks for the best loan and rates. Also be sure to ask about fees, points and any pre-payment penalties. Also consult with lenders before you start house-hunting. This way, you'll know how much you can borrow -- and which houses are in your price range.
2. Prepare all your financial documents ahead of time
This include gathering all the following.
- W-2's
- Tax returns
- Bank Statements
- Pay Stubs or proof of income
- Proof of investments
3. Don't count on the rate you agreed to being the one you end with
A pre-approval will stipulate the loan amount or monthly payment but not necessarily the loan type or rate. When you apply, lenders use that day's mortgage rates to estimate costs and payments. Make sure they lock that rate and verify it at closing. Don't expect them to keep the same rate they pre-approved you with as the actual rate that will be available when you find a property and sign a purchase contract.
4. Watch your credit score
Typically a loan inquiry can ding your credit score. (Most lenders use some version of the FICO score to determine your eligibility for credit and what interest rates and other terms they should extend to you.) But the credit-scoring models are designed to allow for mortgage loans. The score ignores mortgage, auto and student loan inquiries made during the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. Need more information on debt management? Read here.
5. Watch the clock
Typically your pre-approval letter may only be good for 30-90 days so when you are ready to find a home, then apply for the loan.
If you are ready to look for Sedona properties and home please call me anytime. You can start your online search here or let me handle all the searching for you.
