What is Prequalification?
Very simply, a prequalified quote is not a guess or an estimate. It is an accurate quote based upon your risk profile – without the need for submitting a formal application. For more information, I invite you to take a moment and read our indepth consumer advocacy article on the subject of prequalification.
Prequalification has its benefits. It too gives you an idea of how much house you can afford. Additionally, you can become prequalified without having the lender check your credit report. However, prequalification does not mean approval. You may decide on a house, only to find during the approval process that you cannot get approved for that home loan amount after all. Because your prequalification is often based on information you give the lender, and not an actual credit check, the qualification is merely a reflection of what you may qualify for, if everything is as you represent. Prequalification can be a good idea if you are shopping around, looking for the best interest rates. This way you can get an idea of what different lenders offer, without actually having to authorize an inquiry into your credit. The stronger option of pre-approval With pre-approval, you are actually approved for a home mortgage loan. You should receive documentation that you can show to home owners and real
This is your first step when buying a home! There’s nothing more disappointing than finding the perfect home and finding out you can’t afford it. Come to us and we’ll tell you how much we can lend you before you go house shopping. We’ll check your credit history, your income, debt and give you a pretty good idea of the price range you can realistically afford. A seller will look more seriously at you, a agent will have an idea of what houses to show you and you will benefit by arming everyone with the knowledge that you are not wasting your time or theirs!
. 2. My real estate agent recommended that I get a commitment letter. What is a commitment letter, and why should I get one? A commitment letter is given by the lender stating the terms which it agrees to provide a mortgage to a homebuyer. Commitment letters help you set realistic goals while you’re house-hunting, provide the same negotiating ability as a cash buyer, and enable you to move quickly once the perfect home is found. 3. When mortgage lenders refer to “PITI” what exactly are they referring to? PITI is Principal, Interest, Taxes, and Insurance- the components of a monthly mortgage payment. 4. When my loan officer asks me if I want to waive my escrows, what exactly does that mean? When you waive escrows, you take the responsibility of paying taxes and insurance, as opposed to having them included in your monthly payment. Waiving escrows may add a small fee to your closing costs. You can only waive escrows if your loan value is 80% or less on your first lien. 5. What does my mo
