A good preapproval factors in not just your income, but your income after deductions. If the mortgage deal looks too good, it may be. Recommended books on real estate: 100 Questions Every First-Time Home Buyer Should Ask Ten Steps to Home Ownership Other Resources: Wells Fargo -- Online Financial Services

Getting Preapproved for a Mortgage Unless you’re going to be paying cash for your home, getting a mortgage preapproval from a competent and reputable lender should be any buyer’s first step when considering shopping for a home. And though many online tools and resources exist to help buyers today, it still pays to seek out a lender who can personally guide you through all your choices and options. Depending on your credit rating and job history, everything is possible, including 100% home financing and interest only loans as well as the more traditional 20% down, 30 year fixed mortgage There are a few things to keep in mind when starting your search for a preapproval. 1. A good preapproval factors in not just your income, but your income after deductions (especially if you are self-employed or have additional 1099 income), as well as your assets and current monthly debt payments. 2. Your real estate agent doesn’t receive a financial incentive for referring you to a lender. I’m unsure of the law in all states, but in New Jersey, it’s illegal for lenders to offer agents financial incentives. Your agent will have closed scores of loans with anyone he or she recommends and will recommend them to you so that your experience with the mortgage process is as professional as possible. 3. Allowing multiple loan institutions to run your credit can lower your score. Banks give the best loan rates to the best credit candidates. Choose who you let run your credit wisely. 4. If the mortgage deal looks too good, it may be. A loan from a lender who doesn’t do many loans where you’re buying or doesn’t maintain a local office may lack the staff and expertise to expedite your loan in a timely manner, delaying your closing and costing you additional dollars. 5. Loan rates change, and you usually can’t lock in a rate until you actually go to contract on a home. Many lenders post their rates online where you can check them once you’re prepproved and actively searching for a home. One myth I want to dispel: an agent who asks if you’re prepproved and for how much, and who asks to see your preapproval letter isn’t just trying to figure out the most expensive home you can afford. A good agent wants to show you homes you can make your own. If you’re buying in a market where multiple bids drive most homes over asking price, they’re going to have to convince a seller’s agent that your contract is the best -- and a buyer’s mortgage lender’s ability to deliver on the preapproval is an important part of that process. A good agent also knows that buying a home is a very emotional decision. I'm not going to want to watch you fall in love with something you won’t be comfortable in when the monthly payments come due. At our first meeting, I’ll show you recent comparable sales to give you an idea at what price homes on any given weekend might sell, not just where they’re listed. And I’ll keep their eyes open for that rare bargain, as well. Great agents don’t earn a living pushing their buyers into the most expensive house, we do so because the buyers we’ve worked with in the past send us their friends and relatives to work with. Making sure you’re happy is the best way I continue to grow my business -- last year, 50% of my customers came to me via recommendations from buyers and sellers I'd helped in the past. Making sure you receive the best service in every area of your purchase or sale is my highest priority. Jennifer Ley Schweppe Burgdorff ERA