When Is A Mortgage Approval An Approval?

March 24th, 2019
loan approval

When is an approval really an approval? When is an approval only a conditional approval? Below are the different levels of “loan approval” you can get for a mortgage:

1. Pre-Qualification:

This is done before you make an offer on a home. This is only a loan officer analysis, and supporting financial documents are not required. This is a review of the applicant’s income and debts using standard methods of determining housing and debt ratios to indicate the maximum loan amount for which an applicant would qualify, subject to the satisfactory appraisal, further verifications of income, employment and credit history.  This is the lowest form of analysis you can have done.

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How Much Documentation Needs To Go Into a Pre-Approval Letter?

July 15th, 2018
paperwork stack

Today’s real estate market can be competitive for everyone, no matter what price point you’re shopping at. That’s why it’s important to understand the ins and outs of the home buying process before you hit the market. Let’s talk about what getting a mortgage pre-approval letter involves, how you can do so, and why it’s a good idea for anyone heading into the market for a new home. Read the rest of this entry »

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Why Do Sellers and Realtors Want Me To Be Pre-Approved?

June 24th, 2018
pre approval approved

Homeownership is a major component of the American dream as it provides you with your own piece of property to put down roots and live your life. You might think the process starts when you first go out hunting for houses or condominiums, but it often begins long before the initial meeting with a realtor when you contact a lender for pre-approval. Homes are major purchases, and it’s understandable that you have to meet certain qualifications before the transaction goes through. Here are a few reasons why the seller and realtor might want you to get pre-approved, as well as an overview of the entire process. Read the rest of this entry »

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Pre-Approval Letter Versus Pre-Qualification Letter: What Is the Difference?

June 3rd, 2018
qualification

When you’re beginning the home-buying process, figuring out what you need to get your mortgage loan can seem complicated. You may even be tempted to find your dream home first before you apply for a mortgage. However, going through the pre-qualification and pre-approval processes at the start of your search can make the entire experience go more smoothly.

 

Before you meet with a lender or mortgage broker, you should have a good understanding of how the loan process works and what you’ll need to provide in your application. This guide covers the basics of loan application, qualification, and approval. Read the rest of this entry »

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What Portion of My Income Should I Spend on a Mortgage?

November 28th, 2017

What Portion of My Income Should I Spend on a Mortgage?

 

Deciding on how much mortgage you can afford is very complicated with several things to consider. Before you plan to spend the maximum amount you’ve been approved for, consider what you feel comfortable with. And before you treat your home purchase like a zero-sum game consider spending a sufficient amount to buy enough house to keep you happy for a longer period of time, due to the hefty transaction costs of real estate. Read the rest of this entry »

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Should You Match Your Pre-Qualification Letter To Your Offer, Or Show Your Maximum?

September 18th, 2014

When a homebuyer makes an offer on a home they may need a pre-qualification letter to include with the offer. Most realtors will ask the lender who has pre-qualified their client to write a pre-qualification letter to match the exact sales price of the offer. But a few realtors will ask for the pre-qualification letter to be written for the maximum amount the buyer is qualified. The reason there are different interpretations is due to Read the rest of this entry »

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The Pre-Qualification Letter Fake Out

June 12th, 2014

brian-martucci-prequalification-letter-fake-out

I had a client I was working with recently who had a realtor I didn’t know. This realtor wanted to write a pre-qualification letter for an offer they wanted to make on a house, to take a shot at getting the realtor commission, and wanted me to write up a pre-qualification letter for a mortgage amount I did not think the buyer could qualify for. The realtor just wanted to get the property under contract and tie it up to see if we could work it out somehow after the fact. Think this is a rare event? I bet it happens Read the rest of this entry »

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