What is the difference between pre-qualification and pre-approval?
Pre-qualification and pre-approval are not the same. For pre-qualification the loan officer only needs the minimal information. However, during the pre-approval process the loan officer does virtually all the work involved in getting a full approval. Therefore, when you are pre-approved, you are in a much better position to negotiate.
Why should I be pre-approved?
Pre-approval is the first step to home ownership. Without a pre-approval, many sellers will not accept an offer on their home. Also, realtors are reluctant to show homes unless you have been pre-approved. Moreover, in cases of multiple bids on a home, a pre-approval greatly improves your bargaining position.
What should I bring to my loan application?
Here is a list of things that you will need to bring to your loan application
- Last 2 W2’s and 1040’s
- Last 2 payments
- Bank/stock statements for the last three months
- Contract of sale on home you are buying/selling
- Landlord address for last 2 years (if applicable)
- Divorce decree (if applicable)
- Certificate of eligibility or DD214 (VA Loans Only)
What if I don’t have enough money for a down payment?
Often the down payment required is less than you think. We offer a variety of programs that require a minimal down payment. There are also programs available that require no money down. An FHA loan, for example, typically requires a 2.25% down payment which is lower than most conventional loans. Your Select Loan Specialist can help you decide which loan program is best for you.
When should I start looking for a mortgage?
It is best to investigate mortgages before you even start looking for houses. Not only can a loan specialist give you a pre-approval, a loan specialist can help you determine how much you can afford to spend on a house. They can also help you determine what your monthly payments will be, to help you determine what fits into your budget.
What are points?
Points are a percentage of the loan amount. One point equals one percent of the loan amount. For example, on a $100,000 loan one point equals $1,000. Paying points will reduce the interest rate on the loan, which in the long run will save you money.