Houses are expensive. Probably the largest purchase you'll ever make. That's why very few prospective homeowners have enough cash on hand to purchase a home outright. Instead, most homebuyers seek financing (a mortgage) to cover the difference between what they've saved, and what they need, to buy a home.

What's my price range?

Determining how much house you can reasonably afford, and the size of your mortgage, requires carefully evaluating:

1. Savings-how much have you set aside to cover a down payment on your home, as well as your closing costs?

2. Affordability-how much can you safely borrow, and still meet all your financial obligations?

As a trained buyer's representative, I can answer all your questions about factors to consider in evaluating your financing options and determining a reasonable price range for your home purchase.

When selecting a lender, your goal is to obtain a mortgage loan with terms that are most favorable to your situation. In order to find the best home loan for you, contact several lenders to discuss the mortgages they offer, their rates, closing costs, and other fees. If you already have a mortgage, contact that institution too.

Mortgage loans are available from many sources, including:

Mortgage Companies
Savings and Loan Associations
Banks
Credit Unions 

What's the difference between being pre-qualified and pre-approved for a mortgage?
Typically you will first pre-qualify for a mortgage, then get pre-approved before you have found the specific home you wish to purchase. What is the difference?

Pre-qualification: An informal determination by a lender or mortgage broker stating how much mortgage you can afford.

Pre-approval: A guarantee in writing by a lender to grant you a loan up to a specified amount.

What are the advantages of being pre-approved?
There are two advantages of being pre-approved for a loan as early as possible in your home-buying process:

1. Sellers will find any offer you make more attractive if you are pre-approved for a mortgage.

Credit ratings are built upon information provided by banks and other finance companies, based on your performance against past loans, credit cards, and bank accounts. If you've made timely payments and properly managed your bank balances, you probably have a solid credit rating.

Mortgage lenders use these ratings to evaluate you as a potential borrower. A good credit rating puts you in a better position to secure attractive financing rates on your mortgage.

It's a good idea to check your credit rating, even if you're sure you have an excellent record. Sometimes blemishes can appear in your credit history, without your knowledge. Mistakes can be removed-but only if you know about them and take steps to correct them.

Credit Reporting Agencies
Experian: 888-397-3742
Equifax: 800-685-1111
TransUnion: 800-888-4213

Before applying for financing, review your credit report from all three agencies. The easiest way to do this? Visit http://www.annualcreditreport.com/. (Or call 877-322-8228.) This centralized site allows anyone to request a free copy of their report, once a year, from all three reporting agencies.