Tips For The Obtaining Your Mortgage Pre-Approval
This is the first and most important step of the homebuying process because it allows you to find out if you qualify for a mortgage and if so, what your maximum purchasing power is. There is no benefit to looking at homes before you know either of these items. If you are working with a Realtor, they will generally want to see a copy of your pre-approval before they show you homes and most sellers will not look at a purchase offer unless you can provide proof that you can obtain a mortgage.
Obtaining a mortgage pre-approval can generally be done over the phone, but don't hesitate to meet with the mortgage consultant if that is more comfortable for you. This may allow you to communicate better what your goals are regarding the purchase of a home. You will want to tell your mortgage consultant what you want your maximum payment to be and the maximum total amount of money that you can use towards the purchase of a home. This will allow your consultant to figure out which mortgage program will be the best for you.
Tips For Obtaining Your Mortgage Pre-Approval
1. Be Prepared - When calling or meeting your consultant, make sure to have a month of paystubs, tax returns, and bank statements handy. This will make sure that you are giving the most accurate information possible.
2. Multiple Quotes - Call 3-4 banks or mortgage companies to find out what they are offering. You don't need to apply at each one of them. Get pre-approved at one mortgage company and once that is done, you can call around to see what others are offering for the same program. Make sure to get Good Faith Estimates from each one and get them on the same day. Mortgage rates can fluctuate daily so you want to make sure that you are comparing apples to apples. Your realtor should be able to review the GFEs with you to help you make the right decision.
3. Consider Seller Concessions - If you are a bit strapped for cash, consider using seller concessions. Seller concessions are monies given by the seller to the buyer to help pay for closing costs. An example of this would be if you are buying a property for $120,000 and your total closing costs are $6,000. You could roll that money into your mortgage by having a contract for a home for $126,000 and the seller gives you back $6,000 towards the closing costs, therefore, you would only need money for the required down payment. The amount of seller concessions that can be used does vary based on mortgage program. For example, a conventional mortgage with a down payment of 5% will allow up to 3% seller concessions while an FHA mortgage will allow up to 6% seller concessions. Your mortgage consultant will be able to assist you with determing how much you can use.
4. Look At Grant Programs - There are many grant programs available throughout the Syracuse area. Home Headquarters has some nice downpayments assistance programs available to homes purchased in the city as well as throughout the county. If you are looking in the Syracuse University area, there are UNPA Grants that are available. Also, ask your mortgage company if they work with the Mortgage Credit Certificate program. If you qualify, this allows you to take a percentage of the interest that you pay on your mortgage as a tax credit. This will allow you to put more money in your pocket versus using that same interest as a tax deduction.
