McBride Kelly Real Estate News & Advice

Buying a home is likely to be the largest purchase you make in your lifetime.  Helping you every step of the way is our job and we will perform it as efficiently and effectively as possible.  Our blog is intended to provide you with as much helpful background information and advice as possible.  Please reach out if you have any questions at all. We would love to talk with you!

April 27, 2021

The Importance of Preapproval

Get Preapproved for a Mortgage Loan

     Getting preapproved for a home mortgage loan is the first step to getting the actual loan. Through this process, a mortgage lender or broker will review your qualifying criteria (credit score, income, debt, etc.) to determine how much they are willing to loan you. If you'd like to learn more about the preapproval process first, continue reading below. We have compiled all of the information you need to understand this step in the mortgage process.

 

Mortgage Preapproval Explained

     When you get preapproved for a mortgage loan, you are essentially finding out how much money a particular lender is willing to lend you. The word "particular" is a key part of that last sentence, because Lender 'A' might be willing to give you more or less money than Lender 'B.' They all have slightly different underwriting and approval guidelines. But let's stay on track here.   Preapproval goes a step further than prequalification, which is just a basic review of your finances. Through this process, a lender will review your finances in greater detail and will preapprove you for a certain amount. Before we go any further (and before I confuse you with any more lingo), let's define each of these similar-sounding terms:

Prequalification -- The process of determining how much a borrower (home buyer) can afford to borrow, based on a basic review of their finances. Gives you a general idea of what you can borrow. Generally does not require a formal mortgage application. Pre-qualification is non-binding, which means there is no guarantee you'll actually get approved for this amount.

Preapproval -- Similar to the prequalification process described above, but based on a more in-depth review of the borrower's financial history. Gives you a more accurate idea of how much you can borrow. Generally requires a mortgage application. This process takes place before you have selected a home, which distinguishes it from the final approval described below. Pre-qualification is non-binding.

Approval -- This is the final approval by the mortgage lender. It takes place after you have chosen a home and made an offer. It usually requires a home appraisal as well.

     So there you have them -- the three mortgage terms that create the most confusion among first-time home buyers. I hope this clears things up for you. Here's something else to keep in mind...

 

Which Steps are Necessary in the Approval Process?

     If you wanted to, you could skip the first two steps listed above -- but obviously not the last step. Theoretically, you could start house hunting before you even get a prequalification or preapproval letter from a lender. Or, you could skip the prequalification process and request a more thorough preapproval review, right from the start.

     What's my advice? I recommend the second path I just described. I recommend that you apply for the preapproval process before you hire an agent or start looking at houses. Here's why: Being pre-approved for a home loan helps you in other ways as well. For one thing, it shows the sellers that you're capable of buying their home. This can give you a leg up during the offer process, especially when multiple buyers are competing for the house. When you've been preapproved by a mortgage lender, it's the next best thing to having the money in hand. Of course, the preapproval is not a binding agreement, so you don't know for sure if you'll get final approval for that amount. But it gives you a pretty good idea of what to expect.

     If you'd like to get started right away, just click on the link above and provide the information requested on the following page. Or, if you'd like to learn more about the mortgage pre-approval process before venturing into it, you should refer to the information below.

How to Get Preapproved

     As we discussed earlier, it varies from one lender to the next and also from one borrower to the next. There are many variables at play. But there are certain things you need to have going for you, regardless of which lender you choose. Here are some things you should strive for, if you want to get approved for a mortgage with a decent interest rate:

  • Let's talk credit scoresIf you want to get pre-approved for a loan (just to get your foot in the door), you'll probably need a FICO score of 650 or above. Not written in stone. Just an average. If you want to qualify for the best rates, you'll probably need a 760 or above.
  • You'll also need a down payment of some kind. The size will vary based on the type of the loan and other factors. FHA loans require 3.5% down, and traditional loans require anywhere from 5% - 20% down. This won't be needed for prequalification or preapproval, but it will be for the final approval. The lender will check your bank statement to make sure you can afford it.
  • Your debt-to-income ratio will also be reviewed. This ratio compares how much money you pay toward your debts each month, relative to your overall income. If you're buried in debt, you probably won't get preapproved for a home loan.
  • You will need a certain level of income to get approved for a mortgage loan. Lenders have different guidelines in this area too, so the minimum requirements will vary.

     In closing, I'd like to point out the difference between mortgage approval and affordability. It's possible to get approved for a loan that's too big for you. It happens all the time, and it's a leading cause of foreclosure. Just because you get pre-approved for a certain amount doesn't necessarily mean you can afford that amount. So you should determine your home-buying budget before we get started on your prequalification.

Source: Home Buying Institute

 

Posted in Home Buying Tips
April 21, 2021

Mortgage Calculator

Access our mortgage calculator so you can calculate your estimated monthly payments. With today's interest rates near an all-time low, it has never been a better time to purchase or refinance your home. Call Tampa's number one real estate company today to get started!

 

Financing your new home

Getting the best rate on a fixed rate home loan has more to do with your qualifications than the lender you choose. In order to get the best rates a lender has available, you'll need to have excellent credit and a low debt-to-income (DTI) ratio. You'll also need a significant down payment and might have to pay points at closing as well. If you have all of these things going for you, then you'll probably qualify for a low rate on your home loan.

For a hassle free mortgage rate quote, click HERE

 

How do home loan calculators work?

There are different types of mortgage calculators and they work in different ways. As a home buyer, you can stick with the basic calculators that give you monthly payment estimates. In order to use them, you will need to know the home loan amount and the interest rate (at a minimum). Then, the rate calculator would show you your estimated monthly payments. Your actual payment may be more or less than what the calculator shows depending on the property taxes and insurance costs.

 

Real Estate Calculator

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Posted in Home Buying Tips
April 14, 2021

Five Tips for Smart Home Buying

The home buying process can be an emotional roller coaster especially if it's your first time. This is especially true for the actual house hunting process when emotions run high. It is, after all, one of the biggest financial moves you'll ever make. So before you begin house hunting, make sure you have a good plan in place. Here are five tips for success with first-time home buying.

Tip #1 - Bring a Friend Along

Do you have a friend or family member with strong opinions on everything? You know the one. Well, bring them along during your house hunting trips. When you think about it, it makes perfect sense. The house hunting experience stirs up a lot of emotions - - excitement, enjoyment, anxiety, fear, frustration and exhilaration. While these emotions are perfectly normal, they can cloud your judgement. That's not something you want when making a big financial decision. You can balance this out by bringing a friend or family member along on your house hunting trips. This gives you an objective ally who can help you identify the pros and cons of each house. Chances are they will also be able to spot aspects of a house you might have missed. 

Tip #2 - Take Pictures of Each Home

Take pictures of every house you visit and categorize them in folders by house address. These photos will help you recall the details of each house in the future when the details tend to blur together. The photos will also give you an opportunity to see each home more objectively after your initial excitement has faded. Then, you can more easily decide which houses you'd like to seriously consider.

Tip #3 - Compare the House to Your Budget

Have you heard the expression "house poor"? House poor is what happens when people spend too much money and take on more of a mortgage loan than they can comfortably afford. Think of it this way. If you have to work longer hours and scrape by each month just to afford a house is it really worth it? Keep your finances in mind no matter how beautiful a house may be.

Tip #4 - Consider the Commute 

So you've found a home you like, and it's well within your price range. The next thing to consider is the location. How far is the home from work? Does it have easy access to the major roadways you need? How long is your daily commute going to be? It’s easy to be so enamored with a home you forget about the drive time. But if you commute every day, drive time is a quality-of-life issue you can't afford to dismiss. Try driving to or from the house during rush hour. It will give you a good idea of what you'll face every day.

Tip #5 - Avoid Snap Decisions

Buying a home will probably be the biggest financial decision of your life. So it deserves careful consideration every step of the way. Even in a hot market where homes sell quickly, you have to make wise decisions based on research. Keep these tips in mind while house hunting and you will have a much better experience.

Posted in Home Buying Tips
April 14, 2021

Curious about Local Real Estate?

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We would love to invite you to do the same!

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You can sign up here to receive your own market report delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can provide you with details not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates
April 14, 2021

Why choose McBride Kelly

Why McBride Kelly?

When its time to sell your home or investment property, choosing the right real estate agent is very important.  MKA Realty's Team offers assertive marketing programs, along with the knowledge, skills, and training accumulated from more than twenty years of buying and selling real estate. We consistently win awards as one of the the most preferred realty choices when buying or selling property in the Tampa Bay area.

 

If you are interested in selling your home or investment property, contact us for a free no-obligation consultation. We will be happy to prepare a Comparative Market Analysis of properties in your area. This valuable information will provide you with a realistic idea of how to price your home or property based on comparative sales and market conditions for your area. We give you the facts, not padded information that over-inflates what the market is doing. You need real facts to know how the market is likely to assess your home. If you are "upside down"  and you owe more on your mortgage than the market will let you sell your home for, you may need to consider a "short-sale".  We can help you with your sale, whatever your situation.

 

MKA Realty offers home sellers a comprehensive marketing plan to expose a seller's property to maximum amount of qualified buyers. With more than a dozen years of experience, we can support you through the entire selling process from choosing the right asking price to negotiating offers and closing escrow.

 

Posted in McBride Kelly