When it comes to buying a home, before you even start searching what's on the market, it's vital to know where you stand financially. After all, the last thing you'd want is to fall in love with your dream home, only to discover it's way out of your price range. That's where mortgage pre-approval comes in! In fact, some sellers and agents won't even work with a buyer if they haven't been pre-approved yet! Here's everything you need to know about the process and how to get the ball rolling.
Pre-Approval vs Pre-Qualification
It's a little confusing, but there are some differences between pre-approval and pre-qualification. Luckily, both are relatively simple processes, and on your part, all you'll need to do is find a lender, gather some financial info and materials, then let the professionals handle it from there. After reviewing what you've provided, they'll get back to with an estimated loan amount. As far as differences go, pre-approval is a little more intense and requires some additional paperwork, but ends up being the more valuable option since it allows the lender to give you a clearer number.
- An accurate estimate of what price range you can afford.
- How much you'll need to come up with on your own for the down payment.
- The minimum cost of a down payment.
- How much the bank estimates that you can afford in monthly payments.
- The loan options that you qualify for.
It might sound intimidating, but getting pre-approved is probably a lot easier than you'd imagine. It's as simple as making a few calls, filling out some forms, and having your financial info on hand. On your end, it shouldn't take long at all!
The most standard option, fixed-rate loans offer a steady interest rate, so you'll know exactly how much you can expect to pay every month.
A little more unpredictable, adjustable-rate mortgages fluctuate with market conditions, so expect your monthly payments to change.
Guaranteed by the Federal Housing Administration, these loans were designed to assist buyers with smaller down payments by offering built-in mortgage insurance.
If you've ever served in the armed forces, you're likely eligible for a VA loan, which doesn't require a down payment and is ensured by the Department of Veteran Affairs.
Here in Northeast Mississippi, we've got plenty of rural land, so there's a good chance you could qualify for a USDA loan. These offer zero-down mortgages in order to encourage home-owning in less populated areas.
Additional Financial Resources
Still have a few questions about buying your new home? Take a look at some of our additional real estate resources, and give us a call with any questions!
Find Your Dream Home
When it comes to purchasing a home in Northeast Mississippi, we're here to be your guides. Whether it's offering recommendations on local lenders, helping you prepare for your mortgage application, or navigating negotiations during closing, we'll be around to answer any and all of your questions along the way. Ready to get started? So are we. Just give us a call!