Are you pre-qualified or pre-approved for a loan?
To get pre-qualified for a loan, information is collected by a Mortgage Banker about your debt, income, and assets. They will look at your credit profile and assess goals for a down payment and get an idea of the different loan programs that would work for you.
To get pre-approved, you will complete a mortgage application and provide various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. Your mortgage options will be reviewed and your application will be submitted 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.
It is important to understand that a pre-qualification letter is just an estimate of what you may be eligible to borrow, not a commitment to lend. You will need a written Pre-approval to accompany any offer you submit on a home. It will assure the seller that you have been approved for a loan for a specified amount and therefore can actually afford to buy their home. Without this, a seller has no incentive to negotiate an offer or even take the offer seriously. This is a critical step that must be completed BEFORE you find that perfect home.
Recognize that 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. 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 amount accordingly.
Interested in getting Pre-Approved? Contact Rick Cardinali at Allstate Financial or Jackie Brinker at Union National Mortgage Company today!