As discussed briefly in chapter 3 and much more in chapter 8, it is important to get pre-approved for a mortgage. Today you will have to be pre-approved for a mortgage or provide proof of funds if you are submitting an all-cash offer. You will have to have the pre-approval done before ever submitting an offer as your offer will not be looked at seriously unless the seller knows you are financially able to purchase their home and can prove it. If you have not done this critical step, please make sure it is done before looking at homes as you may find the perfect home only to lose it because you were not already pre-approved for the financing. Another item to consider when getting pre-approved - If you are going to be looking at townhomes and condos, you must let the lender know this as those properties tend to have Homeowners Association Dues. These monthly payments can be as low as $80 per month and as high as $600 per month or more. Those monthly fees can have a HUGE impact on your loan qualification. So, if you will be looking at both those types of properties as well as single-family homes, please make sure the lender issues you two types of pre-approvals. One for properties with association dues and one for single-family homes without them. Look at some properties in your price range and note how much both the taxes and association dues tend to be and let the lender know the highest on both expenses so they can factor them in when working up the pre-approval. You may have more borrowing power on properties that have low or no association dues. For instance, a home with association dues of $300 per month is taking from you $300 that could be used to pay a potential mortgage payment. If you look at how much loan $300 will get you, we can do an easy calculation. $300 at 7.00% interest rate for a 30 year fixed rate mortgage = ~$45,000.00. That is the
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