Purchasing a home is one of the most important financial decisions that you will make. It is wise, therefore, to be prudent in regards to what you can afford. The following are some helpful questions to examine as you begin the home buying process:

1) What is your price range?
2) What is your comfort level for monthly payments towards the mortgage?
3) How much of a down payment would you prefer to make?
4) How long will you live in the home?

Generally, an analysis of your income needs to qualify for a mortgage is based on an expense variable of 36%. Therefore, all of your recurring debt obligations should not exceed 36% of your gross income. (This varies by state) Use a mortgage calculator to help determine an amount suitable for you.

Pre-Qualification versus Pre-Approval:
It is important to note that we encourage an applicant to become pre-approved for their mortgage during the real estate purchasing process, rather than pre-qualified. The difference between the two makes a dramatic impact on your negotiating leverage as well as on your own decision making. What is the difference?

Pre-qualification is simply an estimate of how much you can borrow. This is based strictly on the information that you provide. There is no verification, and no analysis by a lender. Pre-approval is a definitive loan pledge from a lender, conditional to a satisfactory appraisal of the target property. Therefore, pre-approval gives you an advantage during the negotiation process for the following reasons:

1) Most importantly, a pre-approval letter for a mortgage creates greater credibility for your offer vis a vis other offers for a seller to consider. A pre-approved offer has greater weight than offers subject to financing.
2) A pre-approval gives you the flexibility to react quickly. You know what your limits are in case you need to make a counteroffer.
3) Finally, there is greater peace of mind knowing what your budget is before making an offer on a house.

How do I get pre-approved?
Simply call, fill out an application online, or feel free to meet with a mortgage consultant.

What is required for the mortgage application?
In order to evaluate your qualifications for credit, mortgage consultants will need information concerning your financial assets, your employment history, and finally your credit history. At the time of application, please be prepared to provide the following:

1) Copies of your most recent, consecutive pay stubs (covering 30 days), or a copy of a signed offer letter stating your new salary.
2) Your W2s from the past two years.
3) Financial asset information such as your most recent checking and / or savings bank statements from the last 2 months, and any mutual funds, or brokerage accounts that you may own.
4) Any collateral information may be helpful, such as other non financial assets (i.e. land)
5) Any other pertinent information that may affect your cash flow (such as divorce, or child payments), visas, resident alien cards, etc

If you are a self-employed borrower or receive your income on a commission basis, please contact your mortgage specialist for further information.