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Pre-Approval Process
Many buyers apply for
a loan and obtain approval
before they begin the
search for the home
they want to buy.
Unless a person is going
to pay cash for the
home, a
loan application
will have to be made
sooner or later.
Pre-qualification by
a lender is a simple
procedure by which you
get an opinion as to
how much you qualify
for and can discover
any obvious obstacles
that might cause problems.
It is a good idea, but
it is not as thorough
as pre-approval.
Pre-approval entails
making a complete application,
ordering the credit
reports, verifications
and everything for the
borrower. The
Mortgage Company will
issue a commitment subject
to a specific interest
rate and points and
the satisfactory appraisal
when a property is located.
There is usually a time
limit placed on pre-approval
commitments. Youll
want to be ready to
look at homes and make
a decision after you
receive your pre-approval
commitment.
There are several distinct
advantages to using
the pre-approval program:
-
You look at the "right"
homes
that you can afford.
Choosing a home
that you may not
be able to afford
wont disappoint
you.
-
You save money dealing
with a seller who
is comfortable
about tying up their
home with a party
who has a definite
loan commitment.
This is one less
contingency for
the seller to be
concerned with.
-
You close more quickly
because in most
cases, the thing
that takes the most
time is getting
a mortgage.
The credit reports
and all of the verifications
take time to be
mailed out and returned.
-
You minimize trauma
of not knowing whether
or not you qualify.
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Next - Items Needed
for Credit Application
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