Why Get Pre-Qualified?

1. Pre-qualification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes or a few hours at most, and is free.

2. While a "pre-qual" is non-binding to the lender (because the information you provide has not been verified), it does serve as a good indication to potential sellers of your general creditworthiness.

3. These days most sellers will NOT accept an offer without at least a pre-approval letter, so if you are serious about buying this is the first step towards getting you in your new home.

What Loan Programs Are Available?

There are many different types of financing available to you and meeting with a lender will help you determine what you can and can not qualify for and what loan program would be the best.  There are DOWN PAYMENT ASSISTED loans available, but certain financial, demographic and credit qualifications must be met.

Here are the most common loans:

FHA - FHA is a government backed loan and requires 3.5% of the purchase price by YOU the buyer at closing.

VA - VA is a government backed loan and available to current or previous veterans.  This is a ZERO down loan program.

CONVENTIONAL - There are many types of conventional loans putting down 3.5%, 5%, 10% or 20% being the most common.

USDA- This is a ZERO DOWN loan program backed by the government and available in approved "rural" areas.

What Are Your Costs To Buy?

The largest expense will be your down payment, whcih will be determined between you and the lender.

Other than your down payment here is a list of expected expenses"

Earnest Money - Earnest money goes toward your closing costs and/or down paymentand is a form of deposit to priove to the seller that you have interest in their home.  Typically $1000 or 1% of the purchase price.

Inspection Fee - You will have to pay the inspector at the time of the inspection.  Depending on the size of the home, inspections run between $375-$650.

Appraisal Fee - Depending on the lender, some want the appraisal paid up front.  That can run you about $500-$1000.

Misc Fees - If you're purchasing a bank owned home, sometimes they won't have utilities on and then that will be your responsibility to turn them on.  That could range between $40-$200.  Typically, it is the seller's responsibility to obtain Certificate of Occupancy (CO).  Bank owned properties, it is the buyer's responsibility of obtaining one.  The cost depends on the municipalities fee schedule.  Any cost incurred to obtain a CO is the buyer's responsibility.