Wednesday, June 24, 2009

Federal Housing Administration: FHA, USDA, VA Mortgage Home Loans - Anthony Real Estate


Mortgage Home Loan Pre-Approval Process Made Easy By Anthony Jeanty From: Buy Here Market Enterprise.

Mortgage Pre-Approval Q&A - Getting Pre-Approved for a Loan.


Mortgage Pre-Approval Defined
Pre-approval is when a mortgage lender reviews your credit and financial situation to determine how much they are willing to lend you. 

Normally, you would do this before shopping for a home.
The idea is to get a rough idea what you can afford, and then shop within those parameters.

Later, after you've made an offer to buy a house, you would go back to the same lender for final approval.

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 How to Get Pre-Approved for a Mortgage Home Loan
Before you start shopping for a home, you need to work with a lender to get pre-approved for a mortgage. 

Pre-approval is basically a promise from the lender that you're qualified to borrow up to a certain amount of money at a specific interest rate. 
This promise is subject to a property appraisal and other conditions.
In the pre-approval process, the lender looks closely at your credit and verifies your income (as opposed to pre-qualification, for which your information is not verified).


The lender then gives you a pre-approval letter, which says that your loan will be approved once you make a purchase offer on a home, and once you submit the following documents - the purchase contract, the preliminary title information, the appraisal, and your income and asset documentation.
Keep in mind, though, that pre-approval is not an absolute guarantee that your loan will be approved.


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The pre-approval process will actually determine two things. 
First, the lender will determine if you're even qualified for a home loan.
You must meet their minimum criteria for credit score, debt ratios, income, etc.

If you meet these requirements, the lender will give you a maximum loan amount.
They will also give you a pre-approval letter to use during the house-hunting process.


Note: Getting pre-approved for a mortgage loan is not a guarantee. 
It does not obligate the lender in any way. 

You'll face a secondary review process later on, in order to get your final approval. There's a lot more underwriting involved with the final approval.
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Most lenders have some version of this disclaimer on their websites.
Being pre-approved for a home loan doesn't guarantee you'll get the loan. In order to get a final approval from the lender, you'll have to go through the full underwriting process.

And that doesn't happen until you've Made an offer to buy a home. At that point, you would give your lender a copy of the purchase agreement so they could evaluate you and the property.

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Pre-qualification --
Through this process, you would provide the lender with very basic information about your financial situation.

This would include your monthly income and debts. Based on this, the lender will give you a ballpark amount they might be willing to lend you. 

"Ballpark" is the key word here. It's not a very in-depth process. In most cases, you can get pre-qualified without even submitting a mortgage application


Pre-approval -- This is a more in-depth (and more useful) version of pre-qualification.  When you get pre-approved for a mortgage loan, the lender will actually start to verify your financial background. This is what sets it apart from pre-qualification. 

They will request a variety of documents from you, such as tax records and bank statements.  
 They will also check your credit score. The pre-approval process gives you a more accurate idea of how much you can borrow. That's why I recommend it so strongly.

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Why is it important to get pre-approved?

When you're ready to make a purchase offer, both your real estate agent and the seller will want to see a pre-approval letter. 

This proves that you're likely to be able to make the purchase and, therefore, you can be taken seriously.
 In a competitive housing market, sellers prefer a pre-approved buyer to those who, for all anyone knows, might be unable to close the deal.
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Why Do I Need a Mortgage Pre-Approval Letter?

Earlier, we talked about the benefits of being pre-approved for a loan.
Real estate agents will be more willing to work with you, and sellers will be more inclined to take your offer seriously.
You can actually include a copy of your pre-approval letter with your purchase offer.
This is a good practice, because it shows the seller you can likely afford the amount you're offering.

This letter tells people you've been scrutinized by a mortgage lender, and you've met their basic guidelines for approval.
In other words, you're a serious buyer! Put yourself back in the seller's shoes for a moment.
Wouldn't you want buyers to have a letter like this?

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Getting pre-approved for a home loan benefits you in several ways.
 First, it helps you find a real estate agent.
 Most agents will only work with buyers who have been "vetted" by a lender -- and who can blame them?

 This process also helps you identity any financial problems that need to be fixed.
 If your credit score is too low, or you have too much debt, you'll find out about it during pre-approval.
 Last but not least, sellers will be more inclined to accept your offer.

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Here's a more complete list of benefits of getting pre-approuval:
  • Getting pre-approved for a mortgage helps you identify any problems you have (too much debt, a low credit score, etc.).
  •  The sooner you can find about these issues, the better. It gives you more time to correct them.

  • Real estate agents will be more willing to work with you.
  •  If you were an agent, would you spend hours out of your day to help someone who hadn't spoken to a lender yet? I wouldn't.
  • This is why most agents will only work with buyers who have a pre-approval letter.

  • Sellers will take you seriously. Put yourself in the seller's shoes for a moment.
  •  Imagine you get two offers from potential buyers.

  •  One has been pre-approved already and has a lender lined up.
  •  The other buyer hasn't even spoken to a mortgage lender yet.

  •  If the offers were for the same amount, which one would you take? It's sort of a no-brainer.
  •  This is especially important in an active market, where multiple offers are a reality.

  • It also helps you narrow the field when house hunting.
  •  Once you know how much the lender is willing to offer, you can shop within that price range.

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How Do I Get Pre-Approved for a Home Loan?
Most mortgage companies have an online pre-approval form on their websites. If you start the process online, you will probably have to follow up with some additional documents. 
You can fax them, mail them, or deliver them personally

you can submit an application for mortgage pre-approval online.
But you will probably have to follow it up by sending your financial documents. 

Lenders use the online process just to get the ball rolling. It's a good lead-generation tool for them, and it's convenient for you.

Once you fill out the form and click the "submit" button, you'll probably hear from a loan officer or broker within a few hours. They will follow up by phone or email to request additional information.

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 What is involved with getting pre-approved? 
In order to obtain a pre-approval letter you will need to contact a lender. You will typically be approved in 24 to 48 hours if you provide the lender with all the necessary paperwork.
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Documents you'll need to provide to get a true pre-approval 
  • Your W2 from the past two years
  • Your paystubs for the past three months

  • Your tax returns from the past two years
  • Your checking or savings bank statements for the past three months (this will likely have your down payment funds in them as well)

  • Your statements for all your other assets (stocks, bonds, retirement accounts) for the last two months
  • The name and phone number of your landlord (if you are renting) or your current mortgage documents

  • Your divorcee decree, if applicable
  • If you are self-employed: Your business tax returns for the past two years in addition to your year-to-date profit and loss statement and year-to-date balance sheet

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Approval -- This is the final approval by the lender. It takes place after you have chosen a home and made an offer. 
In order to reach this stage, you would need to give your mortgage company a copy of the purchase agreement. 
You'll also go through an extensive underwriting process that could take up to 30 days. The lender will probably require a home appraisal as well.

In my opinion, every home buyer should get pre-approved for a loan (unless you're paying cash for the house). 

It only makes sense when you think about it.
You could spend days or weeks looking at houses in a certain price range, only to find out that you're qualified for a lesser amount.

What a waste of time. But when you start with the pre-approval, you'll have a pretty good idea what you can afford
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Mortgage commitment

A lender will issue a loan commitment after it has approved both you and the property you intend to purchase.

Having examined all of the necessary documentation to verify your ability and willingness to repay the loan, your loan representative will submit your complete application to the underwriter. 

The underwriter will return one of four decisions: approval, approved with conditions, suspended (which means they need more documentation from you before they can make a decision), or denied.

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 IF YOU NEED HELP TO SELL YOUR REAL ESTATE PROPERTY IN SOUTH FLORIDA; 

PLEASE CALL ANTONY A PROFESSIONAL REALTOR. --  // Real Estate Blog /   -- Real estate Service For Buyers And Sellers . //

Areas of Expertise: Real Estate, Insurance, Mortgages And Finance

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If you combine solid Experience, Expertise And Proven Talent With Relentless Passion. You Get Innovation, and Much More Than That, You Get Outstanding Results. Anthony Jeanty - Real Estate Professional, REALTOR IN THE SOUTH FLORIDA AREA.  ANTHONY PROFESSIONAL REALTOR.

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