Do You Have All It Takes To Get A Home Loan Approval
When buying a home one of the hurdles that come to mind is the hurlde that you will go through on the loan application. A new home owner will find this process very daunting.
Thankfully due to the approval rate which is around 90% nationally your loan will be approved.
There are some steps that you should know so that you can start off on a good footing with the loan application. Know if you qualify for the mortgage and determine the range of the price.
In determining the price range, you at least need an idea of how much you are willing to spend. The reason behind this is that there are different financial situations and debt levels and all these you want to factor them in. Between three or four of your annual income is the recommended amount.
Mortgage prequalification is the initial stage of a home loan application. Many people are confused by these two terms prequalification and pre-approval. They do not mean the same. Mortage qualification is lesser than pre-approval and it is at this point that the loan officer asks you questions about your credit and income without any further questions. Mortgage prequalification is not recognized so much by realtors as a preapproval will.
Real estate agents fully know that a person is about to buy the house if they see the preapproval will. During preapproval process your credit history is looked at and a determination is made on the loan amount and interest rate that you qualify for. Click here! To get more details on interest rates. The preapproval letter gives you an idea of the homes you can afford and also give you negotiating power. For the preapproval process you need these documents, borrower ID, tax returns, pay stubs and bank statements.
For your application to be completed you should wait for the three days that have been set by law after which a loan estimate will be sent by the lender. The loan estimate contains details of the interest rates, closing costs and monthly payments. When the loan is finally approved the figures in the loan estimate may vary from the original loan.
The lender has a lot of work to do at this point especially after you have made the application and also examined the estimate. Your loan will start processing and verifying the authenticity of the information given. Lenders will ensure all is in order by looking at your hosue.
Approval for the home loan will either be approved or denied. In case it is an approval, the closing process starts and the interest rate locked.