​The importance of prequalifying for a mortgage

Before you start shopping for a home, you should get an idea of what your spending potential looks like by prequalifying for one of our mortgages.

Sure, you know what you've set aside in your savings account, but it helps to get an idea of what your down payment and monthly mortgage payments will be. This is beneficial because you can tailor your search to properties within your budget. One of the worst possible scenarios of the homebuying process is to find a property that you love and begin the negotiation process, only to discover that you cannot get financing for the amount you need.

The prequalification steps allow you to avoid some of the guesswork of budgeting for a home. Here is what to expect:

  • You'll speak with a bankers to prequalify for one of our home loans in the initial steps of your homebuying journey.
  • You'll provide us with an idea of your current financial standing.
  • We will ask you about your income, assets and debts, among other factors.
  • After reviewing your information and gauging your homeownership goals and what you can afford, we'll provide an estimate for the amount of financing you can receive.
  • You'll receive expert advice on all the loan programs for which you qualify, thereby allowing you to make an informed decision on what loan type is right for you. Finding the "right" mortgage product that fits your particular needs is a key step in the homeownership process.

Benefits of prequalifying for a mortgage
When you formally request financing by completing an application - whether that be for home or auto loans or any other purchase - we take a look at your credit report in addition to the debt-to-income ratio and other factors examined for a prequalification. This is noted as a credit inquiry on your financial history and could affect your credit score, especially if you have multiple inquiries that aren't within a short period of time.

Prequalifying for a home loan can help you determine if you're prepared to become a homeowner and have enough income to make monthly mortgage payments without having your credit history examined. If, for instance, you're aware that your score could use some tender love and care, you can spend time repairing it before you actually apply for a mortgage while concurrently starting your home search.

Furthermore, you get an idea of your future costs of homeownership, such as how your mortgage payments will add up with maintenance, utilities, property tax and other expenses. This can not only help you determine what home price you can afford, but it also helps you create a budget for your new life as a homeowner.

For more information about smart ways to manage your finances, contact Landmark Bank.

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