San Diego, CA (PRWEB) January 23, 2014
LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. One of the recent articles posted on this website provides borrowers with a helpful guide for home loan pre approval in 2014.
The article says, “One of the most common mistakes first-time home buyers can make when shopping for a house is to enter into the process without an understanding of how much home they can afford. Seeking pre-approval not only keeps you from wasting time looking at homes outside your price range, but can keep you from the disappointment of finding a home you truly want, only to find you can’t afford it. Instead, you can limit your search to homes and neighborhoods within your means. In addition, once you are ready to put in an offer on a home, sellers will take you more seriously and often give your offer priority over similar terms without pre approval.”
Loan Love says that having pre approval allows home buyers to act quicker and gives them an edge when it comes to negotiations. In addition, getting pre approval gives them a base from which they can shop around and take a look at the different loan options that are available to them. The article then goes on to give three tips for mortgage pre approval which can help new home buyers to navigate the process more smoothly.
The first thing that borrower will need to do is to gather all the necessary paperwork. LoanLove.com explains, “Unlike pre-qualifying, which simply relies on your best estimates about your financial situation, the more involved process of preapproval requires you to provide the prospective lender with documents that will be used to verify your financial and employment situation. These documents are required of both you and your co-borrower, if applicable. Ensuring you have these documents available at the start can help to speed up the preapproval process.”
The article also advises new home buyers to carefully review their credit report and correct any errors they may find. It explains that during the pre approval process, the loan officer will take a look at the borrower’s credit report and be alert to any signs of trouble, such as late payments, reckless use of credit and charge offs. While some of this may be the borrower’s fault (and care should be taken to eliminate these mistakes in the months leading up to a loan application) there is also the fact that many people have errors recorded on the credit reports. Borrowers should request for their free copy of their credit report (which is available once a year) to check for errors and dispute them before attempting to apply for a loan.
Lastly the article urges borrowers to do their best to improve their debt-to-income ratio. The article explains that while it may be difficult to increase your income, there are usually many ways to decrease your debt. Paying down credit cards and any other loans before seeking pre approval are all ways to make your DTI ratio look better for lenders.
In the end, Loan Love states, “Preapproval does not guarantee you will receive a loan. Once your offer is accepted on a property, the home will need to be appraised and your lender will need to formally approve your loan if all qualifications are met. But first time home buyer pre approval does bring you much closer to final loan approval and offers significant advantages in the home-buying process.”
For more information on the mortgage pre approval process for first time home buyers, please read the full article at LoanLove.com.