7 Tips to Get Pre-Approved for an NJ Real Estate Mortgage
The what’s and why’s of NJ Real Estate mortgages
During the height of the real estate boom, getting a mortgage was as easy as picking out a new coffee table for the living room. Now, homebuyers have to race through rings of fire before they can sign on the dotted line. Today, the first step in landing a home loan is obtaining a letter of pre-approval. This means a mortgage lender has verified that you are approved for a mortgage of a certain amount over a fixed time frame. Pre-approval letters are prepared even before you have picked out your home. They remove some of the uncertainty in the home buying process. In the current housing market, NJ Real Estate agents and sellers will not want to work with buyers unless they have one.
See below for hints on how to obtain a pre-approval for a NJ Real Estate mortgage faster:
Shop around, and shop early for your NJ Real Estate Mortgage
When looking for pre-approval, talk to a few NJ Real Estate mortgage lenders to find the best mortgage package that suits your needs. More are not necessary to get a good deal because loan packages are generally very similar and pricing tends to be comparable.
Do not expect a rate quote NJ Real Estate Mortgage
A pre-approval will specify the loan amount or monthly payment, but not essentially the loan type or rate. When you apply, lenders use that day's mortgage rates to ballpark figure costs and payments. Just do not expect them to keep the same rate they pre-approved you with as the actual rate that will be presented when you find a home and sign a purchase contract.
Know you are not obligated to one particular NJ Real Estate Mortgage lender
Pre-approval does not bind you to a particular lender; it is merely a promise, even though an uncertain one, that the lender is eager to make the loan. The NJ Real Estate buyer is not compelled to borrow from that lender.
Give the NJ Real Estate Mortgage process a little time
Pre-approval letters, and the paperwork they certify, have expiration dates. If you are still house-hunting after 60 days, and you are anxious, ask your lender to revalidate the preapproval letter. NJ Real Estate sellers want to be sure the buyer's financial situation has not changed since the time the lender initially checked them out. If any part of your financial picture has changed such as your credit, job status, income or assets, you should notify the lender so the pre-approval can be adjusted.
Prepare your financial biography
Getting pre-approved means an NJ Real Estate lender must assess and verify your income, credit, and assets to guarantee you could make the basic monthly payments on a house. In the wake of the housing bust, borrowers must be more informative when it comes to their finances. Your lender should tell you specifically what you need, but be prepared to include bank statements, recent pay stubs, proof of investment income, and W-2 or 1099 statements for the last two years as well as federal tax returns.
Carefully watch your credit
Typically, a loan inquiry can blemish your credit score. If you applied for a number of credit cards within a short period of time, for example, your FICO score might decrease, although the credit-scoring models are intended to allow for mortgage loans. The score ignores mortgage, auto and student loan assessment made during the 30 days prior to scoring. Also, the score looks at your credit report for mortgage, auto, and student loan inquiries more than 30 days old. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.
Deal only with a reputable lender
Sellers now are looking much more closely at who the buyer's lender is. To avoid situations where the lender might not be able to distribute the loan, they want to see that any potential NJ Real Estate buyer is working with a financially sound and reputable lender. Most national brokerages and banks have local branches, so buyers should ask a local real estate agent, and the buyer's agent who is representing them, for any recommendations.
The Real Estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a Real Estate professional who will provide valuable information and trustworthy advice. For more information on NJ Real Estate, call us today or click here to be connected with one of our top Real Estate specialists.
