Pre-Approval Continuedby Jo Neal on 02/04/11
During this process you must determine how much money will be needed for the down payment. A traditional loan now requires 5%-20% down. FHA loans require 3.5% down. This down payment amount must be secured before the final loan approval. Lenders are now requiring borrowers to validate credit worthiness up to the hour prior to the loan closing! Your debt-to-income-ratio will be determined. This compares the amount you pay towards your debts each month relative to you total income. You must have income to be approved for a mortgage secured by the property being purchased.
You will only be considering properties that meet your maximum loan amount. This allows you and your broker to focus only on properties in your budget.