Why Should I Get Prequalified For A Mortgage? Part 1:
Why Prequalify for a home mortgage?
Pre-qualifying
for a loan makes you an appealing buyer in the eyes of the seller.
Pre-qualification approves you for up to a certain mortgage amount,
even before you look at your first home. Once you do start looking,
you won't waste time looking at homes you won't be qualified for-and
you'll be in a strong position to make an offer as soon as you find
something you like. Selecting the best financing package available is
as important as finding a home that meets your needs. There are three
factors to consider in determining how much you can afford:
1. Down payment -
Most loans require a down payment between 10 and 20 percent of the home
price. If you are able to make a down payment of 25 percent or more,
you may qualify for special mortgage programs offered by a variety of
lenders.
2. Ability to qualify for a mortgage.
Most lenders require that your monthly mortgage payment, including principal,
interest, taxes and insurance, should not exceed 28 percent of your
gross monthly income. They also expect your total installment debt (regular
scheduled payments of 6 months or longer debt-car loans, credit card
balances, etc.), including the proposed monthly mortgage payment on
your new loan, not to exceed 36 percent of your gross monthly income....
Why
Should I Prequalify for A Mortgage?, Part 2
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