This assures them, 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 MCAL are discussed in the "Origination" section of Chapter Three. During the pre-approval process you will fill out a non-binding application that includes information about your income and assets, your employment and current living situation. We will run your credit to determine your FICO scores from all three credit bureaus and examine your liabilities. This will allow us to understand your financial profile and your Debt to Income (DTI) ratio. Your DTI is determined by how much you will pay in housing 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. The MLO will match this information with various loan programs to determine which will best suit you.
STEP 3: CREATE A LIS TE A LIST OF NEEDS V F NEEDS VS. WANTS
You will determine what is most important to you in a home — the non-negotiables — vs. what you’d like to have in a home — things you might need to let go or defer. Determine what you need (think number of bedrooms or bathrooms, garage, laundry room, finished basement, etc.) vs. what you want in your home (such as a fenced-in yard, gourmet kitchen, deck, walk-in closets). Then, write these items down so that you will eliminate wasting time and energy looking at houses that don’t meet your criteria, and your budget.
STEP 4: CHOOSE A LOCATION
Location, location, location! You hear that term in real estate
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