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Getting a Legitimate
Lender and Getting Pre-Approved
It used to be that buyers could go
house shopping and when they have found their dream home, then they go to
get pre-approved. However, in today's market, that has proven to be one of
the least effective methods in landing the dream home.
Most lenders can pre-qualify you for a mortgage over the phone. Based on
general questions about your income, debt, assets, and credit history,
lenders can estimate how much mortgage you qualify for. However, being
pre-qualified and pre-approved are different things. Pre-approval means that
you have applied for a mortgage; you have filled out the mortgage
application, received your credit report, and verified your employment,
assets, etc. When you are pre-approved, you know exactly what the maximum
loan amount will be.
A pre-qualified letter is not verified and in essence, does not count for
much if you are competing with other buyers who are pre-approved. When you
are pre-approved, you and the seller know exactly how much house you can
afford. It gives you credibility as an interested buyer and lets the seller
know immediately that you will qualify for a loan to buy their property.
In addition to being pre-approved, it's important to be pre-approved with a
legitimate lender. Legitimate lenders include: banks, mortgage bankers,
credit unions, savings and loan associations, mortgage brokers, and online
lenders.
Some lenders to avoid: those who lose a form or misplace a file, those who
gather information from you in an unorganized manner, those who are not
informed about interest rates, points or costs, and those who cannot provide
you with the right information |
