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Buyers Checklist

Joe Crain

Prequalifying Helps Determine How Much House You Can Afford

Before you start your house hunting in earnest, the real estate professional with whom you are working likely will "prequalify" you to determine a price range you can afford. According to the Joe Crain, ABR®, prequalification is a necessary part of the home buying process that helps save you time and money.

"Don't be shy or withhold information about your income or credit status. Your real estate professional isn't trying to pry. Rather, he or she must know all details related to your ability to obtain a mortgage," Joel Comp, Mortgage Broker of the Gold Financial Services says.

By candidly discussing your financial situation, you'll give the agent the information necessary to show you homes you can afford, Crain notes. "If you don't open up, you are placing the real estate professional in the role of a tour guide, not someone who can help you find a home within your budget. You'll wind up wasting your time and that of the seller," he says.

Once you have signed a contract to purchase a home, you must choose a lending institution or mortgage company from which to obtain your home loan. Your loan application will request financial data including your place of employment, assets, and liabilities (including recurring debts such as credit card bills and car payments).

Here are two important tips on loan qualification from the Gold Financial Services 1) Do not borrow the down payment without disclosing the loan, submit fake letters-of-credit or gift letters, or make secret financial arrangements. 2) Accurately list your income and assets, all debts and the approximate amounts you owe.

You'll most likely be charged a credit report fee by the lender, which will cover the cost of having your credit history examined. Credit reporting agencies compile credit reports on consumers, including bill payment history, as well as whether you have been sued or filed for bankruptcy among other information.

Federal credit reporting laws do not give you the right to inspect the actual credit report at the reporting agency or to receive an exact duplicate of the report. But, you are entitled to a summary containing the sources of the report's information.

If your ability to obtain a mortgage is adversely affected by the credit report, you have the right to challenge its accuracy and seek corrections.

"The credit report is part of the information the lender uses to determine if you qualify for a loan. It is not a mechanism to prevent you from buying. Remember, lenders want to make loans, not turn them down," Comp says.

Joe Crain is one of more than 40,000 members of the Real Estate BUYERS AGENT Council (REBAC) of the NATIONAL ASSOCIATION OF REALTORS®, who have attained the ABR®, Accredited Buyer Representative, designation. As the world's largest association of real estate professionals focusing specifically on representing the real estate buyer, REBAC is "The Voice for Buyer Representation," with more than 44,000 active real estate professional members of the organization throughout the world. Use the Buyer Checklist as a convenient way to keep track of all the things you must do to complete the process of buying a home.

___ Prepare to Buy
      ___ Decide to Buy
      ___ Decide to Buy Alone or with an Agent
      ___ Understand Your Purchase
      ___ Understand Your Market

___ Finance Your Home
     ___ Assess Your Finances
          ___ Check Your Credit Rating
          ___ Determine If You Should Consider Buying
          ___ Determine What You Can Afford
     ___ Review Your Lender Options
          ___ Review Lender Types
          ___ Review Lender Terms
          ___ Review Lender Savings
     ___ Pick the Right Lender
          ___ Search Lender Rates
          ___ Understand Loan Pre-Qualification vs. Pre-Approval
          ___ Apply for a Loan
          ___ Organize Information Needed at Loan Application
     ___ Understand Your Down Payment
          ___ Research Acceptable Down Payment Sources
     ___ Estimate Your Closing Costs

___ Find a Home
      ___ Research Neighborhood(s)
      ___ Search Property Listings
      ___ Assess the House

___ Manage the Offer
      ___ Obtain Necessary Forms
      ___ Place a Competitive Bid
      ___ Define Offer Terms
           ___ Review Offer Components
           ___ Review Offer Contingencies
      ___ Review Suggested Timeframes for Completion
      ___ Present the Offer
      ___ Negotiate the Offer

___ Close the Deal
      ___ Review Troubleshooting Section
      ___ Resolve Any Closing Details