While shopping for a mortgage loan brokers and lenders offer to pre-qualify or pre-approved for a mortgage. Home loan pre-qualification and pre-approval are different and distinct processes, so it is important that you understand the difference.
Pre-Qualified
A loan officer or loan processor working for a mortgage lender or broker can typically pre-qualify for a home loan in one hour. Getting pre-qualified for a mortgage is a good first step that will let you know whether you should continue with pre-approval process. To get pre-qualified you will need to complete a mortgage application and allow the broker or lender to pull your credit. It will review the loan application and your credit and let you know if you are pre-qualified.
Pre-Approved
Only a mortgage insurer can be pre-approved for a mortgage loan, loan officers and processors can not. Usually mortgage brokers are not personal subscribers, so normally we can not pre-approve your mortgage. A valid pre-approval is the best tool we can have when buying a new home. The key is to make sure it is valid. A valid pre-approval has been signed by an authorized insurer (an insurer is the last person that says your loan is approved). If a subscriber to pre-approve your loan application advance home all you have to do is find a house you want, we have evaluated, and then you should be able to close within days. Some mortgage brokers and lenders will issue pre-approvals that have not been reviewed by an authorized insurer, be sure to ask.
To pre-approved for a mortgage loan shall provide the insurer with income and asset documentation (W2 bank statements, etc.). The insurer will review your credit, mortgage application, documentation, and then approve for a set loan amount and property value. Once you have been preapproved for a mortgage you are ready to start shopping. The process usually lasts a couple of days.
Knowing exactly what type of mortgage may get you to buy and negotiate with confidence. For example, you could inform a seller that you are preapproved for the mortgage and is prepared to close next week. If the seller needs to close quickly, no matter if another buyer that can not be closed for weeks or months. In addition, sellers do not want to take their properties off the market for long periods of time. The ability to close quickly is a way to get a lot.
Realtors will work much harder for you if you know you have a pre-approval valid. Think about it, if the realtor is spending days or weeks leading you around, want to make sure that they will be compensated for their efforts. By ensuring that real estate that you are approved, they will be willing to spend more time working for you.
In short, a pre-qualification is a good place to start. Once you have the pre-qualification, to proceed with the pre-approval process. Beware of mortgage brokers and lenders that offer pre-approvals not been fully underwritten by a mortgage insurer.
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Article Source: ArticlesBase.com – Home Loan Pre-Qualification Vs. Pre-Approval
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