If you are financing the purchase of a home, your first step should be to find out whether you qualify for a mortgage, and the second step should be to pinpoint how much you can afford. Both of those steps can be accomplished through a mortgage prequalification.
Before you do so, here’s the most important thing to remember about a mortgage prequalification: A prequalification at one place does not equal one at another.
Since a home loan prequalification is typically a simple, quick process (CLICK HERE to learn what a prequalification is), the amount of money you are told that you can borrow does not necessarily mean you will get approved by an underwriter for that amount.
The most accurate way is to figure out how much mortgage you can afford per month, not just the total loan amount. Your monthly mortgage payment usually includes principal, homeowner’s insurance, taxes and possibly mortgage insurance. For instance, two homes cost the same amount to buy, but one has higher insurance and property taxes. The house carrying higher insurance and taxes would have a higher monthly mortgage payment. If they were high enough, then it could be too costly for your monthly budget.
Diligent mortgage loan officers will base your prequalification on a realistic monthly payment after reviewing your tax returns, pay stubs, credit report and/or any other relevant documentation (each person’s situation is different, so some documentation may or may not be required).
At Florida Mortgage Firm, our loan officers are trained to be thorough, professional, and detailed throughout the mortgage prequalification process to help ensure you’re not just prequalified — but prequalified with confidence.
If you have questions about your home financing options or how much house you can afford, call us today at 813.707.6200.
Happy house hunting!
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