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Chapter 4: Secure A Lender

Lenders come in many forms, from mortgage companies to credit unions, and are a necessary step to financing your home purchase.


Getting Prequalified

One of the great myths of homebuying is that becoming prequalified for a mortgage loan is difficult, time-consuming, and filled with hassle. The truth is that it is an easy, painless, and important step in your purchasing process.

Your realtor will refer you to a lender who, with nothing more than your social security number, can run a tri-merge credit report and supply a prequalification letter—for no charge. We cut all of the hassle out of the process.


Why Prequalification is Important

Prequalification gives you valuable leverage in negotiating the purchase of your home. It also gives you hard data about the highest mortgage amount you can afford, and points out the best type of mortgage for your financial situation. We always recommend prequalification because:

  1. It’s quick and easy.
  2. It will tell you how much home you can buy before you start searching—you don’t want to fall in love with a home you can’t afford.
  3. On the flip side, you may be able to afford more home than you think.
  4. Some sellers will not accept offers from buyers who are not prequalified.
  5. In a multiple-offer situation, a prequalified buyer has a significant advantage over a non-prequalified buyer.
Why Mortgage Prequalification Is Important.

Pre-Approval Provides Added Leverage

The step beyond prequalification is pre-approval, in which a lender takes a more in-depth look at your financial situation. To gain pre-approval, you simply submit an application with a few documents to verify your financial and employment status. You’ll need to supply your:

  1. W-2 from the year prior.
  2. Most recent bank statement.
  3. Most recent pay stub.

Your Dream Town realtor will keep the process simple, and you will often receive a pre-approval letter very quickly. Self-employment, divorce and alimony, investment properties, and immigration status may necessitate additional documents. You can often complete your application over the phone or online.

Much like prequalification, your Dream Town Agent uses the pre-approval information provided by your lender to help you:

  1. Select homes in a proper price range.
  2. Understand how low interest rates may allow you to afford more than you think.
  3. Present a strong purchase offer—when you’re pre-approved, you are well positioned to win negotiations.

Improving Your Credit Profile

Past credit problems do not necessarily disqualify you for a loan. Many late payments that show up on a credit report may not have been your fault—for instance, if your health insurance company was late in paying a caregiver, the past-due status could appear on your credit report. Get a copy of your credit report and clear up any past problems to help improve your standing with lenders.

Ready To Get Started?

Let our powerful website connect you to our network of Chicago homes, tailored to your specific needs. Dream Town brokers take great pride in their high client service standards, and are always there to help you navigate Chicago’s diverse market. You’ll benefit from the guidance of your dedicated Dream Town real estate expert throughout the entire process.

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