Qualifying for a Mortgage

An independent mortgage lender makes it easier when qualifying for a mortgage

When you’re getting ready to buy a house, you may not know where to start. Do you scour the listings in real estate magazines? Do you recruit a Realtor to show you around? Do you drive around your target neighborhoods in search of the perfect FSBO (for sale by owner)? Actually, the answer is “none of the above.”

Your first step in buying a new home should be to contact a mortgage planner, such as an independent mortgage lender. By qualifying for a mortgage as your first step, you can know how much money you can borrow and how much money you need to have on hand. It can be a scary step to take, but it’s necessary and actually makes the rest of your home buying experience that much simpler.

Why Pre-Qualify for a Loan?

Pre – qualifying for a mortgage before you go house hunting gives you confidence. You know the price range you can comfortably afford. You have a signed pre-qualification letter from your lender. If you find a house you love, you can make an offer on the spot.

But just to be clear, there is a distinct difference between pre-qualifying for a loan and getting a pre-approval:

Pre – qualifying for a mortgage loan means that your lender has reviewed your finances and will likely approve a loan up to a certain amount, assuming you and the property you want to purchase meet specific criteria. This is a non-binding agreement.
Getting a pre-approval means that the lending institution has examined your financial status in depth and is extending a loan commitment that it will lend you up to a specific amount for the property you want to buy. This is a concrete agreement.

Pre-approval is a more time-consuming process than pre-qualifying, but an independent mortgage lender like Prime Mortgage Lending of West Asheville, which specializes in home mortgage loans, knows the specific questions to ask. A pre-qualification letter from Prime, therefore, carries more weight because they put so much more effort into doing the preliminary qualifying work.

Learning Your Buying Power

To pre-qualify you for a mortgage loan, some lenders do little more than run your credit scores and perform a simple calculation:

Determine your gross monthly income.
Determine your monthly expenses.
Multiply your monthly income by a number between 0.28 to 0.45.
Assuming the result is less than your income minus your expenses, this amount is roughly how much you can afford to pay for housing.

As an independent mortgage lender that underwrites only mortgage loans, GoPrime Mortgage, Inc. . (dba PrimeRate Mortgage Lending, Inc.) goes the extra mile, even at this early stage. They not only review your credit scores, but they’ll also want to review your financial records to confirm your debts, income and payment history. As a result, you’ll not only learn how much you can borrow, but you’ll be further down the path to getting your loan approved. This is one of the ways Prime Mortgage Lending of West Asheville meets its goal to “close on time, every time.”

Compensating Factors in Qualifying

The process of qualifying for a mortgage loan can become complicated quickly. Your lender wants to be assured that you’re a good risk to pay back the borrowed money. Sure, the house itself is collateral for the loan, but no lending institution wants to end up owning a house. It would much rather have a customer who is conscientiously paying off her loan.

So the point of the qualification process is persuading your lender that you can afford the house you want to buy and will work hard to pay off the loan. That’s why you provide your current income, your current debt, and your payment history: to show you’re a good risk.

But few people have a spotless credit history or no past financial mistakes. These can include:

Past bankruptcies
A history of late credit payments
A lot of credit card debt
Very little money saved up
A short credit history
One troublesome loan

An Independent Mortgage Lender to the Rescue

If you have one or more of the issues listed above, a normal bank or credit union may turn you down for a mortgage loan. Prime Mortgage Lending of West Asheville can often find ways to make a mortgage loan work. They offer a wide range of mortgage products and can often help a first-time homebuyer with a loan package that doesn’t require a 20 percent down payment.

The personal response and the range of mortgage products offered give independent mortgage lenders like Prime Mortgage Lending of West Asheville a distinct advantage. A Prime loan officer has the flexibility to help you overcome past financial mistakes or a low credit score. Contact Prime Mortgage Lending of West Asheville to learn how an independent mortgage lender can make a difference in your home-buying process.

Down Payment Options

If you qualify, you may be eligible for a popular first-time homebuyers program. Some loan types — such as a VA, USDA, or FHA loan — don’t require a down payment or require only a small down payment. It’s easier to buy a house when you don’t need a large sum of money upfront.

Another option is using a monetary gift as all or part of your down payment. If you’re fortunate enough to have relatives who’ll help, you can use their gifts to help buy your house. But there are stipulations on using gifts for this purpose:

If you receive a gift, you need to write a “gift letter” that includes:
- The amount is a gift and not meant to be repaid
- Your benefactor’s name and contact information
- The full amount of the gift
- The address of the house you’re buying
- A source of gift funds (Bank account #)
- A valid signature
Different mortgage loan packages have different stipulations on how you can use a gift. Ask your independent mortgage lender about it.

Get Pre-Qualified

Pre – qualifying for a mortgage loan frontloads a lot of the loan paperwork, so you can concentrate on all the other tasks you’ll need to complete to get to your closing day. Consider an independent mortgage lender for a smooth process and answers to all your questions. Here are some helpful links, as supplied by Prime Mortgage Lending of West Asheville: