Buying Your First Home ~ Part Six

At RE/MAX Lakes Area Realty, we are in the business of making dreams come true, and for a lot of people, making a dream come true involves buying your first home. In order to help you with that decision, we’ve come up with a series of articles…useful tips that will help you be prepared when buying your first home. Check back here often for the next article in the series, and be sure to subscribe to our blog!

Tip 6: Get Prequalified or Preapproved?

If you're considering the purchase of a new home, you may be concerned with the issue of finance. Attaining the right mortgage is a key step in the home buying process, but it doesn't have to be a stress-inducing one. Most lenders offer prequalification, pre-approval or both to help you know where you stand. Here is the difference between prequalification and preapproval:

Prequalification: prequalification is a preliminary estimate of how much you can afford to pay for a home based on information you provide. Because credit and employment information aren't validated for prequalification, it can only be considered a rough idea of a monthly mortgage payment and loan size. This can be a useful guide as you begin the home buying process, however.

Preapproval: preapproval is a written commitment from a lender to finance your home purchase up to a set amount. This indicates that the lender has taken a close look into your financial history and has agreed to lend you a specific amount of money, reliant on certain details like a finalized sales contract and professional inspection. Pre-approval indicates to sellers that you are a serious homebuyer.

Regardless of which option you utilize, or even if you take both steps, you'll be able to shop with much more confidence. Why wait until you find the perfect home to discover problems with obtaining a mortgage?

If you would like more information on how either process can help you get into the home of your dreams, give us a call at 218-963-9554 or email us at remaxnsw@uslink.net  We’ll be happy to put you in touch with a RE/MAX Lakes Area Realty agent who can answer any of your real estate questions.