Home Mortgage

Obtaining a home loan is one of the most important steps in the home buying process. There are many lenders and loan types to choose from. It is important to research lenders and compare rates to get the best possible rate available. Be sure to obtain your credit report as soon as possible to fix any problems and raise your score as much as you can. Getting pre-qualified is the initial step in the mortgage process. Generally you will supply the lender with your overall financial picture, including your debt, income and assets. The lender will evaluate this information and give you an idea of the mortgage amount for which you qualify. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. However, a lender can then explain and recommend the type of mortgage best suited for your situation. Pre-approval is the next step and is more involved. Your lender will perform an extensive check on your financial background and current credit rating. From this, the lender can determine the specific mortgage amount for which you are approved. You’ll also have a better ideal of the interest loan rate charged, and in some cases you may be able to lock in a specific rate. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to shop for a home at or below that price level. Pre-approval shows sellers that you are able to make the home purchase. The advantage of completing the pre-qualification and pre-approval steps before you begin to look for a home is that you’ll know in advance how much you can afford. This way, you don’t waste time guessing or looking at properties that are beyond your means. Getting pre-approved for a mortgage also enables you to move quickly when you find the perfect home. When you make an offer, it will not be contingent on obtaining financing, therefore allowing you to save valuable time. In a competitive market, this tells the seller that your offer is serious and could prevent you from losing out to another potential buyer who already has financing arranged.