For most buyers, finding a mortgage lender is a critical step in the process of buying a home in the Boston area. For sellers, knowing that a potential buyer is pre-approved for financing can be a significant factor in the decision-making process. I recommend getting pre-approved by a local Boston, reputable and professional mortgage lender before you start looking for a home. It not only helps you focus your search to appropriate properties, it gives you a significant advantage over other buyers when you finally make an offer on your Boston dream home. As it is often required by most sellers, by having it in advance, there will be one less source of stress and anxiety!
The mortgage process begins with you. There are a number of questions that will need answering when you begin. For example, you may want to start by thinking about the following:
- What is your price range?
- What is the amount of down-payment you would like to invest?
- How much would you be comfortable paying on a monthly basis?
- How long do you think you will live in the home?
Once you have established these preliminary boundaries, it would be beneficial to speak with a mortgage consultant; together, you can determine the optimal loan amount and program best suited to your needs.
PRE-APPROVAL VS. PRE-QUALIFICATION:
There are two terms incorrectly being used interchangeably in today's marketplace: pre-qualified and pre-approved. They sound similar, but their impact on a transaction is quite different.
Pre-qualification is an estimate of your borrowing power. This estimate is based only on the information you provide and is not verified by a lender
Pre-approval is a firm loan commitment issued by a lender, subject to a satisfactory appraisal of a property to be purchased. When you have been pre-approved, your income, assets, and credit have been reviewed to the satisfaction of the lender
Pre-Approval provides real benefit. Here are several reasons to consider getting pre-approved early in your homebuying process:
- Confidence: Knowing that you are pre-approved for home financing allows you to search for properties with confidence, having eliminated financing issues
- Credibility: Providing a pre-approval letter increases the credibility of your offer in the eyes of homeowners who often have several offers to consider
- Agility: Knowing your financing capacity allows you to respond quickly
- Focus: Getting pre-approved early in your homebuying process allows you to focus on the most important goal: finding the perfect home
DOCUMENTATION:
When you speak with a Boston mortgage consultant, they will need information concerning your employment history, your financial assets, and your credit history. In order to process your loan, they typically need to obtain the following documentation at the time of application:
- Copies of your most recent, consecutive pay stubs (covering 30 days), or a copy of a signed offer letter stating your new salary
- Most recent 2 years W2's
- Most recent 2 months consecutive bank statements (all pages) to verify assets, including checking/savings, mutual funds, and brokerage accounts
- Miscellaneous information, such as copies of resident alien cards, visas, divorce decrees, etc., may also apply, depending on your particular situation; your mortgage consultant can advise you about documenting any unique information
For more information regarding the mortgage process, click here.
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