Mortgages & Home Loans

Prequalified – you will need to provide the lender with financial information such as your income and the amount of savings and investments you have which helps them to estimate how much money they may be able to lend you. This helps provide a price range of homes you can start looking at. To get prequalified the lender will request a formal credit check. The estimate of the loan amount provided to you does not guarantee you will ultimately be approved for that amount.

Preapproved – you will need to provide the lender with financial documents including W-2 statements, paycheck stubs and bank account statements which will be used to verify your financial status and request a formal credit check. A preapproval will help you when shopping for homes because sellers will have more confidence that you will be able to obtain a loan to purchase their house.

Final approvals will also depend on the property purchased.

It is not required to get prequalified or preapproved before looking for a property, however, it is a good idea to do so as many real estate agents and sellers will take your offer more seriously if you’ve been preapproved. Doing so in advance will also give you a better idea of the price range of homes that you might be able to afford.

A Loan Estimate is a written estimate of costs you (the borrower) will have to pay at closing. This is provided by a lender shortly after applying for your loan.

A rate lock is when a lender guarantees an interest rate for a set period of time, which is typically between loan application and closing. During this period, typically 15-90 days, you’re protected against rate fluctuations.

An appraisal is a written estimate of a property’s current market value. It is based on recent sales information for similar properties, as well as the current condition of the property and the neighborhood. An appraisal is required because it provides written proof of your home’s actual value which helps determine the loan amount you will be approved for. Lenders order appraisals through a third-party company who will provide the assessment.

An escrow account is established at the time of your closing, held by the lender, and contains funds collected as part of mortgage payments for annual expenses such as property taxes, PMI, and homeowners insurance.