7 Tips For A Preapproved Mortgage

By Lisa Scherzer for SmartMoney - Source: www.MSN.com
Having a letter of preapproval can remove a lot of obstacles to homebuying, but the process isn't as simple as it used to be. Preparation and caution are advised.

During the height of the real estate boom, getting a mortgage was as easy as picking out a new coffee table for the living room. Now, homebuyers have to jump through rings of fire before they can sign on the dotted line.

Today, the first step in landing a home loan is obtaining a letter of preapproval. This means a mortgage lender has verified that you're approved for a mortgage of a certain amount over a fixed time frame.

Preapproval letters are prepared even before you've picked out your home. They remove some of the uncertainty in the home buying process. In the current housing market, real estate agents and sellers and builders prefer to work with buyers that have one.

"Before you even get in my car, you want to get preapproved," says Gerry Bourgeois, a real estate broker and president of Towne & Country Realtors in Leominster, Mass.

With a letter in hand, buyers know exactly how much they can borrow -- and therefore how much house they can afford. A preapproval letter shows the seller and the seller's agent that the buyer is capable of buying their house. "For most sellers, the issue is not whether they can get an offer, but whether they can close the deal," says Tara-Nicholle Nelson, a real estate broker in Oakland, Calif.

Agents see preapproved buyers as more serious (and more valuable) because they've taken proactive steps to secure a preapproval. When it's time to make an offer, a preapproved buyer will be in a better position to negotiate.

Here's what homebuyers need to know about the new rules of mortgage preapproval.
Shop around, and shop early: When seeking preapproval, talk to a few mortgage lenders to find the best mortgage package that suits your needs.

Two or three lenders is customary, says Brad Blackwell, a national sales manager at Wells Fargo Home Mortgage in Danville, Calif. More aren't necessary to get a good deal because loan packages are generally very similar and pricing tends to be comparable, he says.

And consult with lenders before you start house-hunting. This way, you'll know how much you can borrow -- and which houses are in your price range, says Ann Stickel, vice president of affiliated services at Michael Saunders and Co., a real estate brokerage in Sarasota, Fla.
Prepare your financial biography: Getting preapproved means a lender must review and verify your income, credit and assets to ensure you could make the necessary monthly payments on a house. In the wake of the housing bust, borrowers must be more forthcoming when it comes to their finances, Stickel says. Your lender should tell you precisely what you need, but be prepared to include:

W2 statements (or 1099 income statements) for the last two years.
Federal tax returns for the last two years.
Bank statements for the last few months.
Recent pay stubs and proof of other income.
Proof of investment income.

Know you're not obligated to one lender: Preapproval doesn't bind you to a particular lender; it's just a promise -- albeit, a conditional one -- that the lender is willing to make the loan. The buyer isn't obligated to borrow from that lender.

Don't expect a rate quote: A preapproval will stipulate the loan amount or monthly payment but not necessarily the loan type or rate. When you apply, lenders use that day's mortgage rates to estimate costs and payments. "Just don't expect them to keep the same rate they preapproved you with as the actual rate that will be available when you find a property and sign a purchase contract," says Danny Valentini, a senior vice president and regional manager at Homeservices Lending, a mortgage lender in San Diego.

Keep an eye on your credit score: Usually, a loan inquiry can ding your credit score. If you applied for a bunch of credit cards within a short period of time, for example, your FICO score might fall. (Most lenders use some version of the FICO score to determine your eligibility for credit and what interest rates and other terms they should extend to you.)
But the credit-scoring models are designed to allow for mortgage loans. The score ignores mortgage, auto and student loan inquiries made during the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping, according to MyFico.com. Also, the score looks at your credit report for mortgage, auto and student loan inquiries more than 30 days old. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.

Deal only with a reputable lender: Sellers now are looking much more closely at who the buyer's lender is. To avoid instances in which the lender might not be able to deliver on the loan, they want to see that any prospective buyer is working with a financially sound and reputable lender, says Blackwell. Most national brokerages and banks have local branches, so buyers should ask their real estate agent (and the buyer's agent who is representing them) or builder for recommendations.

To satisfy any doubts you might have about a particular lender, visit the Better Business Bureau's Web site to find out what kind of reputation they have.

Watch the clock: Preapproval letters -- and the documents they verify -- have expiration dates. Those dates vary by lender, but the letters are typically valid for 90 days, Blackwell says. If you're still house-hunting after, say, 60 days, and you're concerned, ask your lender to revalidate the preapproval letter. Sellers want to be sure the buyer's financial situation hasn't changed since the time the lender initially checked them out.

If any part of your financial picture has changed -- your credit, job status, income or assets, for example -- you should notify the lender so your preapproval can be adjusted.

Foolproof Fall Plants

Source: My Home Ideas.com/www.MyHomeIdeas.com

Try these six easy ideas for gorgeous gardens to provide great color throughout the fall.

Fall Flowers
Curious what to plant now for great color throughout the fall? We've highlighted our favorite autumn bloomers, from 'Alabama Sunset' coleus to heirloom mums.

Mexican Sage
Purple Mexican bush sage and yellow chrysanthemums make a simple, striking fall combination.
This sage has velvety purple-and-white blooms and grayish-green foliage. Forming a large, rounded mound, Mexican bush sage reaches 3 to 4 feet tall. It begins to flower in September and continues until frost.

Coleus
Hardy throughout the fall season, coleus adds bright splashes of color to any landscape.
The new foliage of 'Alabama Sunset' coleus is bright chartreuse but quickly turns pinkish-red (as shown here). It looks stunning through both stages. To highlight its rich colors even more, plant this coleus beside light blue flowers-such as those of wild ageratum.

Blue Asters
Ethereal New England asters add long-lasting color to fall gardens.
While these asters are rather inconspicuous for most of the year, the 2- to 3-foot-tall plants come into their own around mid-September, producing billowy clouds of blooms. Their delicate blue petals encircle small yellow centers; although the centers soon fade to brown, the petals retain color for almost an entire month. Here, New England asters are paired with light pink mums for a colorful show.

Sedum
A fall classic, 'Autumn Joy' sedum combines dependability with remarkable color and structure.
About the only thing that can kill this sedum is too much water or shade. 'Autumn Joy' first blooms a dark pink, then turns a bronzy red. Here, its broccoli-like blooms and thick, sturdy stems add both structure and color to this fall garden.

Mums
Fall-blooming heirloom mums make great garden companions for asters, salvias, and ornamental grasses.
'Ryan's Pink' mums, at left, have rose-colored blooms that look great with the purple spires of Mexican bush sage. When the plant gets full sun and a good thinning every few years, it produces fall blooms that resemble blushing pink daisies.

Containers
Fall gardens don't have to stay grounded. Try hassle-free container gardening in the coming months as well.

Pansies and violas make great choices for an autumn container garden. Light, however, is the most critical factor to consider when placing your pots; choose a location that receives at least four to six hours of sunshine every day.
Groom pansies regularly, removing spent blossoms to encourage new growth. Violas do not need deadheading, as they bloom freely.

TEXAS' EXISTING HOME SALES, PRICES UP

TEXAS (Real Estate Center, CNNMoney.com) – A total of 18,643 existing single-family homes were sold in Texas last month, a 4 percent increase from September 2008, according to MLS data compiled by the Real Estate Center at Texas A&M University.
The median price rose 2 percent to $147,900 during the same period, and the state finished the month with a 7.1-month inventory of existing homes.

Meanwhile, the National Association of Realtors reported today that, nationally, year-over-year sales of existing homes were up 9.2 percent last month. The median price of homes sold in September was $174,900, down 8.5 percent from last year.

WHEN WILL RECESSION END?

COLLEGE STATION (Real Estate Center) – Three things have to happen before the current recession can be declared ended. One is underway, said Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University.

"I think the economy will begin to turn for the better once the health care and cap-and-trade issues are settled. Those two political debates are creating substantial uncertainty for business owners and investors," he said.

The personal savings rate is the second trend to watch, said Dotzour.
"Over 70 percent of the U.S. economy is consumer spending," he said. "When the savings rate finally levels out, consumer spending will start to increase again."

Increased corporate profits are the third trend that must occur to bring the recession to an end. There is some indication that has already begun. The last three data points were all up. Rising profits lessen the urge for companies to lay off workers.

Research Economist Dr. Jim Gaines added that the increased corporate profits have come from reduced costs, not the kind that leads to expansion.

"Keep your eye on these three issues," Dotzour said. "When they are resolved, the economy will begin to turn the corner."

TEXAS CITIES LABOR AWAY

TEXAS (San Antonio Business Journal) – Four of the five best labor markets in the country are in Texas, according to a new study compiled by Portfolio.com.
Austin leads the way, followed by San Antonio. Houston ranks fourth and Dallas–Fort Worth fifth.
Landing at third is Baton Rouge.

All 100 metropolitan areas in the study, including those in Texas, have seen employment decline since last year. However, while 5 percent of the nation’s private-sector jobs have disappeared since June 2008, the collective decline for the 'Texas Four' has been 2.6 percent.
The Texas markets still have 589,500 more jobs than they did five years ago.
Portfolio.com used a nine-part formula to analyze employment trends in the nation’s 100 largest labor markets. The formula used midyear U.S. Bureau of Labor Statistics data for 2004–09, including unemployment rates and trends, and raw and percentage changes in private-sector employment.

MANY MIGRATE TO TEXAS

NEW YORK (CNNMoney.com) – Texas had the highest net migration in the country in 2008, according to the U.S. Census Bureau.

As other states suffered through a falling economy last year, the Lone Star State experienced an influx of residents, thanks to relatively stable housing and employment markets.
The population grew by 140,000 in 2008, after subtracting those leaving the state from those moving into it.

The Census Bureau also reported that fewer residents were moving within their home states.
The percentage of people who lived in different homes within the same state dropped to 12.6 percent during 2008. It was 12.8 percent in 2007 and 13 percent in 2005, when housing markets were hopping.

POSITIVE PREDICTIONS FOR TEXAS ECONOMY

AUSTIN (Austin Business Journal) – The Texas economy is predicted to begin a slow, steady recovery in 2010, according to BBVA Compass’ U.S. Regional Watch third-quarter report.
The report predicts a 1.7 percent increase in the state’s gross domestic product (GDP) in 2010, following a small contraction in 2009. This will be aided in part by a surge in home sales, according to the bank’s economists.

Home sales across Texas are predicted to increase by 4.5 percent in 2010 after declining by 12 percent by the end of 2009.

Though Texas projected a 9.5 percent deficit at the beginning of the year, it is the only state among the seven Sun Belt states covered by BBVA Compass to forecast a balanced budget in 2010.

The report also said that Texas will benefit the most from funding through the federal government stimulus program, considering the amount of money to be received by the state equates to its entire 2009 budget shortfall.

BUILDER CONFIDENCE RISES AGAIN

WASHINGTON (National Association of Home Builders) – Builder confidence in the new single-family home market edged higher for a third consecutive month in September, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released Wednesday.

The HMI rose one point to 19 this month, its highest level since May 2008.
The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor."

The index gauging current sales conditions rose two points to 18, while the index gauging traffic of prospective buyers rose one point to 17. Meanwhile, the index gauging sales expectations for the next six months declined one point to 29.

Specifically, the Southern region of the United States posted a two-point gain to 19.

TEXAS TO LEAD ECONOMIC RECOVERY

SAN ANTONIO (San Antonio Business Journal) – The four major Texas metros will be among the first in the nation to recover from the recession, according to a nationwide forecast by IHS Global Insight.

San Antonio and Austin will lead the way, bouncing back to their prerecession job levels sometime next year, predicts the Lexington, Mass.–based economic forecasting firm.
Houston and Dallas–Fort Worth are among eight other metropolitan areas predicted to recover by 2011.

TEXAS CITIES RANK HIGH ON ECONOMY, HOUSING PRICES

TEXAS (Dallas Morning News) – Texas metros boast the strongest economies, according to a just-released analysis by the Brookings Institution.
Austin ranked first in a second-quarter comparison of 100 U.S. cities. Dallas–Fort Worth ranked fourth and El Paso sixth.

Houston's economy landed it at ninth, but the Bayou City ranked first among cities with the biggest increases in home prices. Local home prices jumped 4.9 percent over the last year.
Third-ranked DFW had a 3.8 percent increase in home prices, while tenth-ranked San Antonio had a 3.1 percent increase.