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PhillipsTeam.com the most comprehensive real estate web site for Dallas, Frisco, Plano, Allen and Mckinney Texas. We specialize in buying and selling homes in Dallas and Collin County. |
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Step 2: Mortgage Pre-Qualify/Pre-Approval Process
Now that you know what you want in your new home, you might think you are ready to start looking! We are missing one important step. You are going to need to know what price range of a home you can afford/qualify for. There are two ways to accomplish this. You can get prequalified or preapproved for a mortgage. To accomplish this, you will need to contact a mortgage company. There are differences between prequalification and preapproval for a loan that you should be aware of. Loan prequalification is simple and easy process. The mortgage company will collect financial data from you and they will calculate how much of a loan you will prequalify for. You can get prequalified by simply calling a mortgage company or get prequalified by going through an Internet based mortgage company. The prequalified amount is based solely on the information you provide. Preapproved buyers are actually approved for a loan for a certain amount, a prequalified buyer is only told that they might be approved for a certain amount. Most lenders use an equation for lending. Conventional financing is usually based on 28% of your gross income before taxes. Pre-approval is a much more detailed process. The lender will collect detailed financial information regarding your finances and perform an extensive check on your current financial status. This will ultimately give you the exact amount that you will be eligible for (depending on what type of loan you decide to go with). Being preapproved lets the seller know that you have gone through an extensive financial background check and there should be no unexpected obstacles to buying the home.
Check out our mortgage calculators to get an idea of what price range you might get pre-qualified for.
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