To give you a better idea of what kind of monthly payment you can expect, I have provided a mortgage calculator for your convenience. Enter in the total amount of the purchase price in the mortgage field, along with your down payment amount, interest rate and mortgage term and this calculator will determine your regular principle and interest payment. Note, this doesn’t include possible property taxes, insurance, or applicable HOA fees.
Many lenders in the area work with me and my clients to achieve their goals. From VA, FHA, USDA, traditional mortgages and first time homebuyers, I’m sure we can find the right lending program for you. Unless you’re a cash buyer, the pre-approval process is your ticket to buying property. With interest rates as low as they are, now is a great time to buy.
The calculator is for demonstration purposes only and may not reflect actual numbers for your mortgage. It assumes a constant interest rate throughout the amortization period. Most mortgages have property taxes and homeowners insurance held in escrow, so those monthly amounts will need to be added in to give an accurate monthly mortgage payment.
Every time you make an offer on a piece of real estate, whether that’s land, a condo, an office building, or a home, the more buying power you have the better. Buying power is basically the amount of leverage you can gain in a negotiation. The more buying power you have, the more leverage you have. Leverage will give you a better chance to get the result you want. The best way to get buying power is to have all of your money in the bank and ready to write a check to the sellers.
What if you don’t have enough money in the bank to purchase a home? Fortunately, it is possible to borrow this money from a lender. The best way to get the most buying power is to get a guarantee from a bank that you can borrow the money to purchase a home. This usually involves a two part process. Step one is getting pre-qualified. Step two is getting pre-approved. What’s the difference?
Getting pre-qualified involves having an informal discussion with your lender to determine your budget for a purchase. They will give you a very general idea about the maximum amount of money you’re going to be able to borrow with a very general idea of terms in regards to the length of the loan and interest rate, for example. A pre-qualification letter simply means your bank has given you the go ahead to start looking at houses to purchase because they have a pretty good idea they’re going to lend you the money for the home purchase based on what you’ve told them. The bad news is that this is not a guarantee that you’re going to be able to borrow the money. A pre-qualification is generally not accepted and is often confused with a pre-approval. A pre-approval is the golden ticket to purchasing property. I should emphasize getting a pre-qualification is just a phone call with your bank, and it is imperative that you get a pre-approval letter if you want the seller to take your offer seriously.
Getting pre-approved means significantly more in terms of ability to purchase a home. A bank has basically guaranteed your ability to be able to borrow the amount of money you want to use to purchase a home. When a bank pre-approves your mortgage they have taken the steps to verify everything you have told them in the pre-approval process including verifying employment income, tax returns, cash on hand, etc… Every bank is different in how they determine what it takes to be pre-approved. A pre-approval is a guarantee from the bank that you are a qualified buyer. When a seller sees this, they’re much more likely to accept your offer. Having a pre-approval is almost as good as cash when making an offer. It can take one to two weeks to get a pre-approval letter from a bank, although every lender is different. I recommend getting your documents together as soon as you’re thinking about purchasing.
For more information, please feel free to contact me. I’m ready to answer all of your home buying questions. If you want to get an idea of how much you can afford, or maybe just how much you’re comfortable with borrowing, feel free to use the above mortgage calculator. Of course I can also put you in touch with one of my preferred lenders.