PRE-QUALIFYING VS PRE-APPROVAL

Pre-Qualification:

Your Loan Officer will interview you and take a loan application.     This information will be used to determine the amount of loan you can be approved for and to provide you with a pre-qualification letter.   The pre-qual letter is used when making an offer to purchase and is provided to the Sellers and Sellers Agent and advises them of the terms on which you have been qualified.

Keep in mind that a prequalification is not a guarantee or formal commitment to lend money.   The final decision on loan approval is not made by your Loan Officer but by the underwriter that reviews the final loan application.

Pre-Approval:

After the information you have supplied to your Loan Officer has been verified; such as credit, assets and employment history, your loan application will be submitted to an underwriter for review and formal approval.   A pre-approval letter is issued if your loan is approved.   Pre-approval can help you negotiate with the sellers since it is a conditional approval to lend money.

HOW MUCH OF A HOME CAN I AFFORD?

The rule of thumb is you can usually purchase a home with a value of two to three times your annual household income.   First time home buyer programs are available which allow borrowers to purchase homes of higher values.

CREDIT CONCERNS

Collections? Late payments?   Bankrupcty?   No problem!   We have loan programs available to meet the needs of people with all types of credit.   Let us help you get back on track and on the way to owning your own home.

APR

This is not the note rate for which a borrower applied and does not affect your monthly payments.   The Annual Percentage Rate (APR) is the cost of the loan in percentage terms taking into account various loan charges of which interest is only one such charge.   Fees such as points, processing and underwriting fees, doc prep and private mortgage insurance (PMI) are typically included in the APR.   The APR is calculated by spreading these charges over the life of the loan which results in a rate higher than the interest rate shown on your deed of trust.     APR discourages lending institutions from advertising low rates and hidden fees.   Mortgage companies are required to disclose the APR when advertising interest rates by the Federal Truth in Lending law.

RENT VS. OWN

Why pay your landlord's mortgage?   People are often afraid they can't afford to own their own home.   The amount of money you spend on rent can be about the same as or less than the amount you would spend on a mortgage.   And with the tax benefit to the homeowner, the savings can be significant.  

Right now, part of your rent payment covers certain housing expenses to your landlord, so keep this in mind when estimating your budget.   There are additional costs to your monthly mortgage payment such as property taxes, homeowners insurance, utilities, homeowner's association dues, and maintenance and these become your responsibility when you decided to buy a home.

Consider these advantages when deciding on whether you want to buy your own home...

With the hundreds of loan programs available today, let us help make owning your home a reality.   Call one of our Loan Officer's today and get pre-qualified.

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