One of the essentials in becoming a first-time home buyer is taking the necessary steps for pre-qualification.
The pre-qualification letter comes from a lending institution that you have dealt with on-line or face-to-face, and it indicates a dollar amount that you will qualify for should all the conditions of the lending institution be met. In other words, it’s a cursory look at your income minus expenses at a given period of time.
As mentioned previously, it will make a difference in your eligibility if you are looking at condos; their monthly fee will be added to expenses, where single homes have no fees. From the outset, you should determine which housing is best for you, and have the bank qualify you for either or both. Based on the information you give the bank, the dollar amount you qualify for will probably be different.
Once you have found a home, whether it be condo or single house, your agent will draw up a contract to purchase, using your pre-qualification letter as a tool to have your offer considered. Once the offer is accepted, you must work in earnest with your agent and banker to fulfill all the requirements in your contract during the time allotted.