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Take the Step Pre-Qualify Before You Go House Hunting



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By : Roby Hicks    99 or more times read
A home purchase is very important which is why you need to prepare for it. However, before you go house hunting, it is essential that you prequalify first. Prequalification is essential because this will give you an idea of your price range. How much will you be able to afford? Once you know this, you will no longer be wasting time looking at homes that you will not be able to buy. Such activity can be heartbreaking and tiring. You will be able to get a prequalification letter from your lender once you present the requirements needed by the lenders.

The requirements will be used by the lender to assess the risk of lending you the money. This will give them a hint if you will be able to pay them back or will you just default. Their evaluation will also be their basis for assigning a mortgage term to you. If the evaluation is good, you will have better term, if it is not, then your term will not be as ideal.

If you want to prequalify, you need to check your credit score. In order to do that, you need to take a look at your credit report. Do this before you apply for any loan. If your score is good, you will not have problems with the approval. It may still be approved even if your score is low. However, your interest rates will be higher.

Checking your credit report offers a lot of benefits. First, you will be able to spot errors in the record. Errors are possible in reporting your payments. This is among the reasons why you need to check your credit report at least once a year. If there are errors, file a dispute right away to correct the errors immediately. In order for the credit bureaus to respond to your dispute, be very clear with your letter. Enumerate the errors and attach a copy of the report with the marked erroneous transactions. Do not forget to attach documents that will support your claim.

There are also other factors affecting your score. It may be low because you defaulted. Maybe you are late with your payments as well. All these factors will affect your score. If you want to improve it, make sure that you start paying your dues on time. If you have a lot of loans, pay off some of them. This will take time though, which is why you need to check your credit score ahead of time.

Aside from your credit score, your lender will also look into other information such as your employment record. He will check how long you have been with the company. He will also check your monthly income. The lender needs to verify if you are earning enough to pay off the loan in the future.

Moreover, you also need to prepare other things. You need to prepare enough money for the down payment. You will also need to prepare for the closing costs. The lender will not require this during the prequalification, but this will definitely help if you prepare this ahead of time.
There are 5-Bedroom Homes in Rio Rancho NM. You may also be interested in Townhouses for Sale in Rio Rancho NM as well as in Private Homes in Rio Rancho NM.

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