Buying a Massachusetts home? Please get pre-approved for your mortgage.
For most of us, home buying success hinges on the ability to obtain affordable financing. By obtaining a mortgage pre-approval, you will know the appropriate price range for your budget. You will also be in a stronger negotiating position when you make an offer on a home. Here are mortgage pre-approval tips to help you:
- Pull a free copy of your credit report at www.annualcreditreport.com. Obtain your credit score and credit score tips at www.MyFico.com. If your credit has blemishes, you’ll be dollars ahead by resolving those before you apply for a mortgage.
- Organize your financial file. Your lender needs copies of your last 2 years of income tax returns, plus copies of your recent bank statements and paycheck stubs. Make a list of your active debt payments by monthly amount and outstanding balance. Also include statements for assets, such as retirement or investment accounts.
- Decide how much money you can put down on your home purchase. FHA-backed mortgages require as little as 3.5% down. Conventional loans can go as low as 3% down. If you are a veteran of the Armed Forces, you may qualify for a VA loan with very attractive terms. There are also home buying grants available in some situations that help you with the down payment.
Please note, if you are using a cash gift towards your down payment, speak to your loan officer before accepting the funds from your benefactor! Cash gifts require specific documentation; get the rules up front before transferring funds around.
- Ask us about reputable mortgage lenders in the area. We will refer you to local mortgage experts who will treat you with care and provide you with proper financial guidance.
- Begin the mortgage pre-approval process with your lender. Your lender will examine your income, debts, assets, credit history, and work history. Be prepared to supply more documentation
if your lender requests it. - Your lender will advise you of the mortgage amount you qualify for, along with any conditions or stipulations. You will be provided with a pre-approval letter. This letter is important! It’s a good idea to provide a copy of it when making an offer on a home.
- Do not make any changes to your financial profile once you have a pre-approval in hand. Do not change jobs, buy a car, close out a line or credit, or make major payoffs or purchases. Banks have been very nervous in recent years – they like to see steady behavior.
- Your mortgage pre-approval is generally good for 30 to 45 days. Check in with your lender often, and be sure to renew your pre-approval status as needed!
