Mortgage Pre-Approval Process

By Sonia Smith

If you are shopping for your dream property and are serious about buying, then a mortgage pre-approval is strongly advised for any potential buyer. An approval of a loan is essentially a provisional commitment of a mortgage lender to lend you money based on the details you supply them, and conditional upon you meeting certain requirements. Being approved for a mortgage normally offers many benefits when you search for a property, including; greater price bargaining power, knowing the price you can afford, estate agents treating you more seriously and so on.

So if you would like to get pre-approved for a loan, you need to take care of the process that is normally associated with a mortgage pre-approval, as outlined below:

• Your loans advisor and you talk through to determine your financial strategy and your needs: this includes discussion on the basic mortgage points such as the loan amount required, down payment, purchase price, etc.
• Your mortgage advisor will inform you about the different options available (fixed or variable rate, term interests, payment options, amortization, etc.). And you will discuss the most suitable mortgage product that best fits your needs.
• Your loans advisor will then take your request, along with your personal and financial details, details of your job, your income, your assets, your down payment (if applicable) and your liabilities.
• You give the go ahead for the lender to obtain a copy of your recent credit report to allow the lender to run some credit checks on your personal profile.
• Your financial advisor will advise you on what documents you should provide (confirmation of income, confirming the down payment, etc..) At this stage, a conditional approval of your loan is offered. Where necessary, conditions must be met so that your loan is fully approved.

Get ready for the pre-approval.

You are under no obligation to complete once your loan is pre-approved, but you should still be satisfied with the amount and terms of your pre-approved amount that you can borrow. Therefore it is important that you review all your personal expenses and you have an idea of your future expenses, before talking about pre-approval with a financial advisor.

To discuss your needs for a commercial mortgage or to obtain a pre-approval on a residential mortgage, go to the buy to let mortgage web site.

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Article Source: http://EzineArticles.com/?expert=Sonia_Smith

Potential Benefits Of Pre-Approved Mortgage Loans

By Joseph Kenny

Since it can be such an exhausting and emotional task to find the perfect house, that house that meets all of your immediate expectations for you personally and those of your family, it can be heart-wrenching when you faced the challenges of securing a home mortgage loan. For many people it is a painful experience. The way to deal with this issue is to approach the whole situation of buying a house from a different direction. Have you considered getting a pre-approved mortgage loan before you begin to seriously shop around for houses?

There are a number of reasons why getting your mortgage loan pre-approved can be beneficial. Obviously, the top reason is that if you have already went through the process of getting your mortgage loan completely approved, you will have a definite price range you should concentrate your house hunting efforts. The hassle of seeking approval is out of the way and you can look for your new home with undivided attention.

Knowing what you can spend on a house beforehand has another benefit. You can save yourself (and your family) a tremendous amount of time look at homes that are outside your price range. If you have already picked out what you believe is the perfect house for your life circumstances before getting amount approved for a mortgage, these is the unfortunate possibility that you will not be able to afford it. This, itself, can be heartbreaking.

There is another benefit that may be more subjective and personal but it is nonetheless a recognizable benefit that many people cherish while they are searching for a home. In a word, it is confidence. You can approach the whole business with a deep sense of confidence simply because you have already been approved to receive a home mortgage loan. Having boundaries to work within can be very beneficial for some people, particularly when they are involved in something with such long-term consequences like buying a house.

Obtaining pre-approval for a mortgage loan can have an affect on your relationship with the real estate agent with whom you are working. The agent is more at ease helping you find that house when he knows that you have this pre-approval status. They work to ensure that the original owner of the home is compensated and given the best offer. As a new buyer with pre-approved loan status, you are more attractive to many agencies. Having that financing secured beforehand makes a big difference; it increases the likelihood that you will buy a house through them and they will get a commission.

Perhaps, the most profitable reason for getting a pre-approved mortgage loan is the potential power you have to get a deal closed fast on a new home. Most agents or sellers are looking a more than one offer. Having pre-approved status is a way to make you stand out among the competing bids. This is especially true when other bidders have not secured any similar approval. The seller knows that you will be able to close on a house without waiting around for financing. You could even have the advantage over those who are trying to make higher offers and come away with a house for less money.

With some many clear benefits, securing pre-approval for a home mortgage loan is a great first step that you should take well before seriously looking at houses. It will help you save time and make your search far easier than it would have been otherwise. Take the time to pursue this avenue and you will end up in better circumstances when it comes to buying that house you've always wanted.

Joe Kenny writes for Only Stop, compare bad credit remortgages in the UK, visit them today for mortgages or Glitec for more mortgages and information.

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Article Source: http://EzineArticles.com/?expert=Joseph_Kenny

Are You Sure You Are Pre-Approved For a Mortgage?

By Lisa Theriault

When shopping for a home, the first step should be to get a pre-approved mortgage. But don't be fooled, a pre-approval is not the same as a pre-qualification. A pre-approval is when your lender collects and verifies the information you've provided, whereas a pre-qualification is based on the information you've provided, but which has not been confirmed.

When you have been truly pre-approved for your mortgage, you have provided your lender with confirmation of your income, your down payment, had your credit report checked, and all that is missing is the property.

Remember though, that because you still have to find that perfect property, there still could be the requirement for an appraisal, depending on your lender and whether or not you are getting a high-ratio mortgage (there are currently three mortgage insurance companies in Canada - CMHC, Genworth and Canada Guaranty, and you are required to have approval/insurance coverage from one of them if you finance more than 80% of the value of your house), so be sure to include a financing clause in your offer to allow time should an appraisal be required.

Once you've found your dream home and are ready to proceed with an offer, yours may just attract more attention from the seller because your realtor can ensure them that you have been fully pre-approved, which means you can lift your conditions sooner than someone else who may not have been pre-approved at all.

Having a pre-approval in place before you look for a home also helps takes some of the 'stress' out of what can sometimes be a whirlwind time in your life. By getting the paperwork out of the way ahead of time, you can move your focus to the hunt for the perfect home!

Finding the right mortgage solution to suit your needs can be a daunting task at best. As an Accredited Mortgage Professional (AMP), Lisa Theriault has the expertise and resources to provide you with the most comprehensive mortgage solution. With over 20 years of experience in the financial services industry, she can ensure that her clients get the best, unbiased mortgage plan each and every time. She and her team specialize in home purchase and refinance mortgage planning, so let their experience and expertise work for you. Visit them at http://www.lisatheriault.com/blog today!

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Article Source: http://EzineArticles.com/?expert=Lisa_Theriault

Pre-Approved Mortgage Loan - How Important Is A Home Loan Pre-Approval?

By Lokesh Kumar

How important is a home mortgage loan pre-approval? The short is "very important" but read further before getting your hopes too high only to be disappointed later. What does it mean to be pre-qualified and to be pre-approved for a house loan? Read further to find out more.

It helps to be ready if you're in a competitive market. If you are lucky enough to be pre-approved for a home loan, it can give you an edge over other buyers who may be interested in the same home or condo who perhaps aren't financially stable. If you do therefore take the large step of being pre-approved for a mortgage loan, it's an indication to the home owner that you are serious about buying his / her home and not just bargaining to find a steal!

What you need to do to get a pre-approval for a Mortgage Loan?

First step is an honest evaluation of your financial situation. Add up a list of all your assets comprising your cash, stocks, mutual funds, bonds, savings, IRAs, and any other investment and then deduct all the loans and payments that you have to make. This amount will indicate what kind of house you can afford.

Remember - there are additional expenses while buying a house. This will give you a realistic picture of just how much you can comfortably borrow and how much you will qualify to borrow. It is possible to borrow an amount that will cover the all the insurance and taxes of the first year.

Once you know how much mortgage loan you can afford, you can approach a lender or apply for a home loan online. Many online mortgage loan sites offer quotes from at least 5 lenders. Online mortgage loans are popular because the lender contacts you based on the information given by you. That makes it easier for you narrow down the lenders who are interested in working with you. Also, online application is good for busy people.

What is Difference Between being Pre-qualified and Being Pre-approved for Loan?

Pre-qualified means you contact a mortgage lender and give him/ her, your details in person or on the phone and then he/ she creates a file credit report based on details given by him. This information is usually not verified. You will get a letter stating that you are pre-qualified.

Pre-approved means a commitment from a mortgage lender once you have filled out an application for a home mortgage loan and your details have been verified. These details will include credit report from the three largest credit reporting agencies - Equifax, Experian and Trans Union Corp. Most online applications go through this pre-approval process.

If your credit score is low that does not necessarily mean you will not be pre-approved for a home loan. Some lenders ask for additional details like your salary statement, bank statements, W2 etc. Also, a willing lender will ask questions about the reasons why the credit score is low and why there collection records in your credit report. If the credit score is low but if you still confident that you can buy a house, then you can answer these questions.

This may be a little too much questioning but at least the lender is willing to work with you even though your credit score is low instead of just rejecting your home mortgage loan pre-approval application! Most lenders have knowledge of how to improve your credit score and may give you some tips to increase your score.

To be pre-approved gives you an edge when shopping for a home. You learn to identify the price range in which you're looking to buy a home. This makes it easier for a home seller to accept or reject your offer if you're bidding over a non pre-approved buyer. You must also familiarize yourself with a comfortable monthly loan installment.

Being pre-approved puts you in a better position as serious buyer and your negotiations maybe considered more seriously than other potential buyer who is not pre-approved for a home mortgage. Usually the pre-approval letter has an expiry date. A lot of times the expiry date for the pre-approval letter could be 3 months.

In conclusion, it is best to be pre-approved rather than pre-qualified for a mortgage loan. Be realistic about the amount of home loan you can afford. It is better to live a little below your means than to borrow more than you can afford. There are additional expenses involved while buying a home so you need to factor that into your house loan. So, be prepared when you apply for home mortgage loan pre-approval.

The author Lokesh Kumar is a small business owner and investor. Visit: Home Loan Mortgage and Home Equity. He is a real estate investor with very good knowledge about finance and home mortgages. To discover more about home loan mortgages, refinance, home equity, mortgage rates, mortgage calculator etc. visit his website. This includes a very informative home loan blog.

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Article Source: http://EzineArticles.com/?expert=Lokesh_Kumar

All About Pre-Approved Mortgage

By Bret Dashel

With the near collapse of the credit industry and the banking and housing meltdown, getting a pre-approved mortgage is tougher than ever. If you are lucky enough to have been pre-qualified, consider yourself lucky and take advantage of the situation. Keep in mind that there are differences between the terms pre approved and pre-qualified and they can make a big difference in the way you go about purchasing your home. Here are a few things to help you understand the difference.

Being pre-qualified for a mortgage simply means that a potential buyer has gone through the steps necessary to meet the criteria established by the Federal Housing Authority. It doesn't really have anything to do with being approved by a lender. To be pre-approved, the buyer must get the pre-qualified status verified by a mortgage company and have their credit verified. Nice these steps are completed, then the buyer is said to be pre-approved. So as you can see, getting pre-qualified is actually a necessary step in getting pre approved.

There are certain requirements for pre-qualifying for a mortgage.

Employment history is very important and you generally must demonstrate continuous employment with the same employer for at least two years.

The next important factor is income. You need to show that your income has been steady or even better improving for the last two years. This will help determine the amount of loan you are qualified for.

Your credit report will need to show that you regularly make required payments on your loans and bills. The last two years are the most important and your record needs to be near spotless. If your recent credit history isn't perfect, you should probably forget pre-approval.

If you have a bankruptcy on your record, you can minimize the damage by showing a great deal of recent improvement in your financial situation.

If you have a foreclosure, you will need to wait at least three years in order to get pre-approval. The three years begin at the completion of the foreclosure process.

Average monthly income needs to be at least 30% of the monthly mortgage payment.

Once you meet these criteria, you should be able to get pre-qualified. The next step is to get pre-approved.

Once you meet the above criteria, you will need to fill out the pre-approval application and attach all evidence of meeting the pre qualification requirements. The lender will review the documents and make a decision as to whether you are pre-approved and for how much. A personal interview might be required to clear up anything that is less than perfect in the paperwork. If all is in order, you will be pre-approved and can start shopping for a home with a little more buying power.

Many sellers are willing to offer good deals to buyers who arrive with a pre-approved mortgage. They don't need to worry about going through the selling process only to have the deal fall through due to the buyer not being approved. If at all possible, it is recommended to begin your house hunting with a mortgage pre-approved. This also helps you by giving you the exact amount that you can afford on your home purchase.

Bret Dashel is a senior copywriter for Ratelines.com. For nearly 6 years, Ratelines has been an objective and reliable source of financial information. For factual advice on top cd rates, please visit our site.

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Article Source: http://EzineArticles.com/?expert=Bret_Dashel