client. This assures the agent, and later assures the seller's agent and the seller, that you have the financial capacity to complete the deal. The differences between a pre-qualification, a pre-approval and an TBD commitment are discussed in the "Origination" section of Chapter Three. During the pre-approval process you will fill out a non-binding application that includes your income and assets, your employment and current housing situation. The lender will run your credit to determine your FICO scores from all three credit bureaus and examine your liabilities. This will allow the lender to understand your financial profile and your Debt to Income (DTI) ratio. Your DTI is determined by how much you will pay in housing expense: principal, interest, taxes, insurance (and association fees where applicable) referred to as PITIA, and existing debt, such as auto loans/leases, credit cards, student loans etc., in relationship to your earnings. Your Loan Originator will match this information with various loan programs to determine which will best serve you.
STEP 3: CREATE A LIS TE A LIST OF NEEDS V F NEEDS VS. WANTS
Clarify your priorities: Identify your must-haves (bedroom count, bathrooms, garage, laundry) versus nice-to-haves (like a deck, gourmet kitchen, walk-in closets). Write them down to stay focused and avoid wasting time on homes that don’t fit your needs or budget.
STEP 4: CHOOSE A LOCATION
Location, location, location! You hear that term in real estate often. The house is located where it is, so be as certain as you can that the home is in a place that will be comfortable and convenient for you.
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