Buying your first home may be the biggest financial decision you’ll ever make, so learn as much as possible before taking that momentous step. Start here.
First, let’s review your financial situation. How much can you pay? What this really means is, how much money can you borrow? Which really also means, how much do you earn and how much do you owe?
The general rule is that you can only get a mortgage if your income to debt ratio is 40%* or less. This means that if your family’s income is, say, $100,000 a year, you shouldn’t owe more than $40,000 on credit cards, student loans, car loans, and other debt.
Then make plans to buy the house you Wikipedia can afford now, not five years from now, when your movie is a hit or your new company’s stock goes public. What kind of house can it be?
Once you have a general idea of what you can afford, you will need to obtain a pre-qualification or pre-approval letter for a mortgage. Prequalification is a lender’s overall view of your ability to get a loan. You submit all information to a lender, with no supporting documentation required. You can do it online, over the phone, or in person, whichever is easier for you.
Preapproval is more detailed. It is the document that proves that you are a serious buyer. But it also means putting your affairs in order to prove your financial worth to the lender. The lender will review your bank statements, tax returns, and other financial information at the same time they see if you qualify for any special programs, such as government-backed FHA loans. or VA home loans.
Although neither preapproval nor prequalification guarantees that you will receive a loan, they are much more reliable indicators of your potential to buy a home. What to do with the letter? Include it when you submit your offer on a home; it will make your offer stronger.
See More : https://adelaidepropertyvaluers.com.au/