Articles on Loans | Topics: loans, loan, loaning
by Christian Gutierrez
Pre-approved for a loan? Don't get your hopes up
It pays to be prepared if you're in a competitive market. If you are fortunate enough to be pre-approved for a loan, it can give you an edge over your competitors who may be interested in the same home or flat who perhaps aren't financially sound. If you do therefore take the large step of being pre-approved, it's an indication to the home seller that you are, indeed, serious about buying his home.
So, how do you go about being pre-approved for a loan? Begin by doing an honest self-evaluation of your financial situation. Draw up a list of all your assets comprising your cash, bonds, savings, stocks, mutual funds, IRAs, etc. Against that, make another list of all your debts - e.g. your car installments, credit card payments, loans, etc. A difference of the two will tell you how much you have available toward buying a house. But bear in mind that you will have other additional expenses associated with buying a house. This will give you a realistic picture of just how much you can comfortably borrow and how much you will qualify to borrow. Accordingly, you can meet up with home sellers and express your interest in buying their houses.
With this information at your command, you will be in a better position to begin the process of being pre-approved with a lender. Actually, to be pre-qualified for a loan is a simple process that does not necessitate you're using a particular lender alone. Once this is done, you're one step closer to meeting up with your home seller.
This is the right time for you to learn the difference between being pre-qualified for a loan and being pre-approved. To be pre-qualified means you call up a lender and give him your details on the phone and create an 'in file' credit report based on details given by him. His information is therefore largely unverified and based on this he will give you a pre-qualification verbally or give you a letter to that effect, subject to a variety of conditions. But a pre-approval refers to a formal commitment from a lender once you have filled out an application for a residential mortgage loan and your details have been verified. These details will include a 'tri-merge' credit report from the three largest credit reporting agencies - Equifax, Experian and Trans Union Corp. This is a very initial stage, much earlier in the stage of operations than when the home seller emerges.
| Historical Quote |
The private citizen, beset by partisan appeals for the loan of his Public Opinion, will soon see, perhaps, that these appeals are not a compliment to his intelligence, but an imposition on his good nature and an insult to his sense of evidence.
| —Walter Lippmann (1889–1974) |
|
|
To be pre-approved gives you an edge when shopping for a home. You learn to identify the price range in which you're looking to buy a home. This makes it easier for a home seller to accept or reject your offer if you're bidding over a non pre-approved buyer. You must also familiarize yourself with a comfortable monthly loan installment.
As in any new venture, preparation is a very important step - after all, this is a business scenario involving big money, loans, etc. It is necessary you get pre-approved for a loan before you start pinpointing the house you want. Besides, pre-approval will put you in a better negotiation position with the home seller by allowing you to move in quickly when you find the best house at the right price.
In order to get the best deal at a price that doesn't hurt you too much, you need to shop around for the best mortgage rate, APR, the best loan and terms that suit your financial situation best before you see a home seller. To get pre-approved, be sure you get a mortgage loan commitment from your loan officer rather than a mere pre-qualification letter. And don't allow your real estate agent act on your behalf as a mortgage loan officer too as it will put you on shaky ground.
To avoid such a situation, you should get a referral from a friend, neighbor or co-worker. Also, speak to two lenders or loan officers before deciding. Next, take a hard look at the APR rate. Ask the loan officer for referrals. At this stage, being pre-approved is a somewhat distant dream for you - the formalities being so many. And meeting the home seller? Just a little farther off.
|
We strive to provide
only top rate articles on our website. If
there is a specific loans-related topic that you would like us to cover, please contact us here.
Please note: All personal opinions expressed in the "Pre-approved for a loan? Don't get your hopes up" article belong to the contributing author and are not necessarily shared by LoansCreditConsolidation.com. |
Should I Get a Consolidation Loan?
By Rene Bonner
Should I Get a Consolidation Loan? If you've got a really unmanageable amount of credit card debt, you might be considering a consolidation loan. A consolidation loan is a loan that you can use to pay off all your debts, meaning that you can pay them off for less money without having to worry about lots of different bills....
This Option may not cost you an ARM Consider your Options with Adjustable Rate Mortgages
By Henry McCray
Adjustable rate mortgages, or ARM's, are useful types of mortgages with set plans and terms which may help you in deciding which type of loan to get when buying or refinancing a home. An ARM is flexible and changes during your term of mortgage depending on certain guidelines and adjustments....
In a Fix: Unsurprising Mortgage Payments you can Count on
By Desmond Joseph
A home is one of the biggest purchases you'll ever make. Luckily, you don't need to pay for it all at once....
|
