Before you begin to look for a new home, we should talk! We need to calculate how much you can afford. Most Real Estate Professionals will want to know that you are pre-approved before they begin to show you available properties. This will make you a stronger buyer, too. That’s when it is important to know the difference 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 property.
To get pre-qualified for a home mortgage loan, I will collect information aboutyour debt, income, and assets. I’ll look at 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.
It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment for a loan. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.
To get pre-approved for a home mortgage loan, we will complete a mortgage application and I will collect information that verifys your employment, assets and financial status such as paystubs, W-2 forms and bank statements. We will also need to verify any "unseasoned" funds which is money that has been in your account for less than 60 days from an undetermined source. Usually this is gift money, but we must have a paper trail for that, too. We’ll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.
A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions like clear title to convey the property. If your financial situation changes (e.g. you lose your job),interest rates rise or a specified expiration date passes, the lender must review your situation and recalculate your mortgage amount accordingly. However, it does let a seller know that you are a serious buyer and are capable of purchasing their home.This is even more crucial if the seller is a bank, such as when you are bidding on a short sale or foreclosed property. This process also allows you to close on a purchase much quicker. Often we will only need an appraisal and the title documents to be able to close. That gives you great negotiating power, too!
941.758.0600 office 248.770.7066 mobile/text