Central Keystone Living - Fall 2017 - 13

Preparing for the pre-approval process

Almost every realtor or builder will require pre-approval from a
mortgage lender. This shows that a buyer has serious intentions
and the ability to secure financing.

How do you best prepare for your pre-approval?

1. Prepare a monthly budget with emphasis on reoccurring
obligations. If the budget item shows on a credit report or is
required by law - child support/alimony - it will be counted
in your qualifying ratio.

b. Some lending programs limit you to 36 percent of your
gross monthly income while others allow you to approach
50 percent.
c. Your budget will determine the impact of the mortgage
payment on your cash flow.
2. Explain your employment situation. Most lenders want to see
continuity and predictable income to determine your eligibility.
They will likely require a two-year history for part-time income.
Commission, bonuses and self-employment income also will
generally require a two-year history.
3. Secure funds for down payment. Lenders will examine the source
of your down payment, which may include savings, gift funds
from family or secured liens against an asset (another property,
vehicle, 401k). Be prepared to supply your last two monthly bank
statements. Keep in mind, the loan officer will ask about any
large deposits showing on your provided statement history, so
recent cash or unexplainable deposits are highly discouraged.
4. Improve your credit score. Credit history and credit score have a
large influence on the lender's approval decision. In the majority
of loan products, a minimum credit score of 620 is needed.
Credit scores are influenced by: length of credit history; recent
delinquencies; and total amount of credit obligations (large
revolving or charge card balances having a significant impact);
and collections, judgements, and bankruptcies will result in a
very large drop in your credit score.

a. It might be wise to have your lender review your credit with
you. At times there are errors that can be corrected, thus
improving your credit score. If needed, your loan officer
can help you establish a plan to improve your credit score.

peshkov / 123RF

a. How much payment shock (proposed housing payment
vs. current shelter payment) can you afford?

b. Your credit score also will influence mortgage rate and fees.
Request information sheets on the various programs so you
can compare lenders. Remember, you will likely have this
loan payment for many years!
5. Be informed. Ask questions, follow your lender's guidance, and
promptly respond to requests.
6. Have fun! Buying a home can be a stressful process, but it will
also be one of the most exciting purchases you ever make.
Try to see the light at the end of the tunnel and remember
that your hard work will pay off when you open the door to
your new home.
I look forward to congratulating you at the closing!

Bill Pierce, Sales Manager
NMLS #528201
717-255-7542
bpierce@fultonmortgagecompany.com
Fulton Mortgage Company
201 N. Third Street, Harrisburg, PA 17101

HarrisburgBuilders.com

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http://www.HarrisburgBuilders.com
Table of Contents for the Digital Edition of Central Keystone Living - Fall 2017
