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Is It Find The Home And Find The Loan?
Or Find The Loan And Find The Home?

By Noel Peebles
Co-Author For Sale By Owner Home Selling Secrets ebook.

Most homebuyers go about the process of buying a home
the wrong way! That is; they spend weeks, months and
sometimes even years, searching real estate listings,
driving neighborhoods and visiting open houses looking
for the perfect home. Now I hear what you are saying.
Surely, that is the logical thing to do? Isn't it?
After all, the buyer gets to know what's available
and which properties are for sale at a fair market
price. Unfortunately, that is not usually the best
way to go about things.

Now don't get me wrong... property searching does
provide useful and essential research. The trouble
is; doing that first, can mean doing things back to
front. Why? Because, once the buyer has found the
home of their dreams, they place an offer to purchase
the property subject to obtaining a suitable home
loan. That's where things can come unstuck...

It’s often only at this point, that they begin to
shop for a home loan. All too frequently, the bank
or lending institution declines the home loan
application. The property falls outside the
lending criteria and is deemed to cost more than
the buyer can afford. The buyer therefore loses
the chance to buy the dream home they searched so
hard to find. The deal falls through simply because
the buyer couldn't finance the purchase. The buyer
is frustrated, the seller is frustrated and so is
the inexperienced agent who chauffeured the buyer
around for all those months.

Get the order right: Hunt the loan before the home!

The savvy buyer is the one who shops around for the
home loan first. That way, he or she knows exactly
how much they can (or can't) afford. The buyer can
then confidently seek out only properties that are
within their prequalified home loan price range.

The big advantage in prequalifying for a home loan
is that it puts the buyer in a much stronger
negotiating position. The fewer conditions of sale
that are included in the contract the better.

The seller is likely to take a buyer with a secured
a home loan commitment far more seriously, than they
will a buyer who may need to have a home loan approved.

There are two methods of applying for a pre approved
home loan. The standard way is to supply a home loan
agent with your financial and credit history. The home
loan agent will then "crunch the numbers" and "run the
ratios" to calculate the level of borrowing that can
be approved. A major flaw in this scenario is that the
borrowers often forget to reveal all. They (conveniently)
forget to tell about their 4 overdue credit card payments,
their new car payment or they push their income figures
beyond reality.

The preferred method is to first complete an application
and provide income and employment records. The home loan
agent would then run a credit report and actually submit
the file to a wholesale lender for underwriting before
receiving approval and commitment for a home loan.

The message is simple; get a home loan commitment first,
then find your dream home. Getting the order right will
save you money when negotiating the contract. And, not
forgetting, it is a powerful negotiating tool when
presenting an offer to purchase. As an African safari
guide once told me, "you don't go tracking a lion, find
him and then worry if you have any bullets in your gun!"

By the way - we weren't hunting lions to shoot… we just
didn't want to be eaten alive!

© Noel Peebles, Market Leaders ebooks.

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Noel Peebles is author of the best selling ebook
"173 Powerful Ideas, Tips, Tactics And Proven-To-Work
Strategies To Sell Your Own Home."
For details http://www.forsalebyownerguide.com

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