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 Are you pre-approved for a loan?
Before you begin to shop for a new home, you should set up a time to meet with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.
To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll discuss your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow. Really a pre-qualification is just an educated guess of what you may qualify for.
It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you a significant competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount subject to finding a home. The process to obtain a pre-approval is the same process you go through when applying for a new home loan except that you may have not already found your dream home.
To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to underwriting for the loan that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount we are willing to lend you for your new home.
A pre-approval letter is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage appproval amount accordingly. However, a pre-approval holds more weight with the Seller and their Realtor of the home you wish to purchase as it means you have been through our underwriting process and your approval is subject to you finding a home which will allow a loan amount at or below what we have approved you for.
By going through the Pre-Approval you are demonstrating to the Seller and their Realtor you are committed to the home buying process.
Call us for details, questions or to set up an apppointment to obtain a pre-approval. Or click here to apply online now for a Mortgage Loan Pre Approval.
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