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Tag: Pre-Approval

The pre-approval comes after getting pre-qualified. This is the closest you can get to show your creditworthiness before buying the home. First, your lender will complete a mortgage application. Next, the lender will verify the information provided. A credit check will also be performed. You will finally receive a pre-approval letter. This letter is an offer and not a commitment to lend you a certain amount. The letter will be good for 90 days.

You should also expect questions to pop up during the process. For example, you might be asked about a specific loan payment made with a credit card. Lenders closely look at all details of your finances during this period. Therefore, you must be ready to quickly answer their questions. Otherwise, the lender may become skeptical of you. I recommend that you’re pre-approved before submitting offers on a home. That way, the seller will know you mean business.

The amount of time it will take to become pre-approved will vary from lender to lender. However, you may be able to handle to process online and get results within an hour. Then you might be able to receive a pre-approval letter within the next 10 business days. Just make sure you have given all of the requested information.

Pre-Qualified vs. Pre-Approved

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Pre-Qualified vs. Pre-Approved

Getting pre-qualified and pre-approved are the very first steps of the home buying process. Without this step, you can’t get a mortgage, meaning can’t buy a home. Unless you’re a cash buyer. Nonetheless, most people will have to go through this process before home shopping. If you’re unsure of how much you’re likely to afford, try using a mortgage prequalification calculator first.

Here’s a homebuyer tip from Bank of America: “Expect surprises! Lenders look at every detail of your finances when granting preapproval. You might be asked about a car loan payment you made with a credit card, for example. Be prepared to answer lender questions as soon as they come up.”

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What Is a Mortgage?

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What Is a Mortgage?

A mortgage is a loan secured by the collateral of real estate. Mortgages typically have 15 to 30-year terms and can have a fixed or adjustable interest rate. The borrower is bound to make monthly payments to the principal, which is your outstanding balance. In the case that you stop making payments, the lender can take possession of the property. Otherwise known as the process of foreclosure.

All in all, the lender holds the most stake in your home. Therefore, by making monthly payments, you’re always increasing the amount of ownership in the property. Lastly, here’s a fun fact for you: The origin of the word “mortgage” is Latin and then came from Old French, which initially meant a death pledge.

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