Mortgage Pre-Qualification Question


B

BRH

In the coming months, I plan to sell my home and move to another state.
My home will soon be put on the market, and I'll then be looking for a
new home and start mortgage-shopping.

It's been years since I shopped for a mortgage and times have changed
(Internet, etc). So, I feel that I'm new to this.

What's the best route to get pre-qualified for a mortgage? Are websites
like QuickenLoans.com and LendingTree the best way to go? Are there others?

Also, how soon ahead of the home purchase is it advisable to get
pre-qualified? Finally - What exactly does pre-qualification mean ---
Is it merely a loan amount that's pre-approved or is it locking into
other terms (ie - rate, payoff period, etc.)?

Thanks!
 
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J

John A. Weeks III

BRH said:
Also, how soon ahead of the home purchase is it advisable to get
pre-qualified? Finally - What exactly does pre-qualification mean ---
Is it merely a loan amount that's pre-approved or is it locking into
other terms (ie - rate, payoff period, etc.)?
A pre-qualification is a suggested maximum that you could potentially
borrow. Since there is no loan being considered at that time, you
do not actually go to underwriting, and there is no way to know for
sure if you actually will qualify for that loan or any loan. All it
shows is that someone pulled your credit, asked your income, and
suggested a price range to look at. It really only serves to weed
out those with really bad credit and keeps people from looking at
houses that are far out of their price range.

If you go this route, the best time is far enough in advance so that
if a problem is found, you have time to fix that problem. A bank
or a local lender is a good place to go. There is nothing binding,
so you can pre-qualify at one place, then apply for a loan somewhere
else.

-john-
 
D

David Smith

John A. Weeks III said:
A pre-qualification is a suggested maximum that you could potentially
borrow. Since there is no loan being considered at that time, you
do not actually go to underwriting, and there is no way to know for
sure if you actually will qualify for that loan or any loan. All it
shows is that someone pulled your credit, asked your income, and
suggested a price range to look at. It really only serves to weed
out those with really bad credit and keeps people from looking at
houses that are far out of their price range.

If you go this route, the best time is far enough in advance so that
if a problem is found, you have time to fix that problem. A bank
or a local lender is a good place to go. There is nothing binding,
so you can pre-qualify at one place, then apply for a loan somewhere
else.

-john-
BRH

It is important to keep your terms consistent. John does an excellent
job with pre-qualification. Pre-approval is more involved and means you
are pre-approved for a specified amount, and will be approved for your
mortgage, assuming the house meets the requirements. The rates and fees
of the mortgage will be those at the time the mortgage is applied for or
approved, depending if you lock your rate at time of application.

--
I do the best I can, but I could be wrong.
Please post reply to news group.
David Smith


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D

Don

In the coming months, I plan to sell my home and move to another state.
My home will soon be put on the market, and I'll then be looking for
a new home and start mortgage-shopping.

It's been years since I shopped for a mortgage and times have changed
(Internet, etc). So, I feel that I'm new to this.

What's the best route to get pre-qualified for a mortgage? Are
websites like QuickenLoans.com and LendingTree the best way to go? Are
there others?
In addition to web sites like those, have a look at this site:

http://www.mtgprofessor.com/

It is not a place to get a mortgage, but is an excellent place to get
information about how mortgages work and pitfalls to look out for while
you shop around.
 

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