Saturday, February 27, 2010

PRE - APPROVAL IS NECESSARY!

Many listings in the market today include Foreclosures, Bank Owned Homes, Homeowner Owned Homes, Short Sales, Hud Homes and Auction's it is important to understand what type of financing will approve the right type of home.

I hope this guide will help you in the process of being ready to make an offer on your potential new purchase!!



There are several Mortgage Products available to the able home buyer. It is important to be knowledgeable of what product will fit you and what Lender will be most able to assist and guide you easily through the process.

1. The Call

-It takes a simple phone call to set up the beginning process for purchasing your home. The best place to start is your local bank. See what products they offer, what services they provide and most importantly feel comfortable enough to know that in giving your most secured information, you will be handled most effectively and safely through the process.
- Your Lender of choice will set up a meeting to determine what price range you are able to buy within and what product will best suite your financial needs.

2. The Meet

- Your Lender should be prompt in meeting you at the time that was set. If they are late, confused or hard to understand...it may be time to look elsewhere.
- When coming to the meeting you should be able to present valuable information (W-2's, tax returns, bank statements, identification and any other needed information that is required to start the process. There may be things you will have to bring back in and when those are needed be prompt in doing so to speed up the process!

3. The Product

- The bank of your choice will most certainly have many loan products available. This is MOST IMPORTANT because it will determine what type of house you will be looking into!
- Product Types (These are a few products that are most widely used.)

* FHA / Rural Development: This product is most widely used for first time home buyers. It requires less of a down payment and can be approved to someone with a lower credit rating. This product can be used to purchase any available property (Hud Home, Foreclosure, Homeowner Owned, etc).
* MSHDA: This product is great for someone needed help with a down payment and also helps in repairing a run down home. This product is available to any buyer with a lower credit score, less cash on hand or a buyer wanting to renovate parts of a home. This product can be used only on FORECLOSURE properties in certain areas (be sure to check with your Realtor or Lender to determine which locations are available).
* Conventional: This product is most used by a buyer with a great credit score and has 20% to put down towards the purchase price. In instances with a buyer having a lower credit score, the Lender may require Mortgage Insurance which requires a higher monthly payment. If this Mortgage Insurance is purchased in some instances the Lender may only require 3-5% down toward the purchase price. This product can be used for purchase on any available property (Hud Home, Foreclosure, Homeowner Owned, etc).

There are many other products available to buyers. These few are most widely used and most available.

4. The Result
- At this stage of the process you should know what product you are using and at what price the home can be purchased at. This is valuable information that is useful in making an offer to purchase a home. Your Lender should present you with a PRE-APPROVAL LETTER that should also be given to your Realtor.
- You and your Realtor will be able to narrow the choices and then determine which homes are most attractive to go through.

$$ When starting the home buying process you should already be looking at what is currently available. Speak to a Realtor on the current market and what type of homes are out there. The PRE-APPROVAL LETTER will then determine which houses you should narrow down to and which homes you will then want to view.

$$ The viewing process takes time out of your busy life. This also creates time for your Realtor, the listing Realtor and the owner of the home. Make sure that when you are about to view homes that you have a PRE-APPROVAL LETTER ready. You may fall in love with a house and it's never fun to find out that it sold the next day. Your PRE-APPROVAL LETTER will be crucial in the fact that if you find the home of your dreams...you can make an offer ON THE SPOT!

Thanks Again

Miller Real Estate
149 West State Street
Hastings, MI 49058
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