Monthly Archives: April 2017

//April
24 04, 2017

Mortgage Pre-Approval Frequently Asked Questions

April 24th, 2017|Blog, Mortgage 101|

Pre-Approval

What is mortgage pre-approval?

To be pre-approved for a mortgage means that a lender has looked at your credit and financial history and determined that you would be eligible for a mortgage. A pre-approval generally is a written statement from a lender stating that a borrower would qualify for a certain loan amount. Most pre-approval letters are good for 60 to 90 days.

How do I get pre-approved?

To get pre-approved, you will need to complete an official mortgage application and provide the lender with the necessary documentation to perform an analysis of your credit and take an in-depth look at your financial background. Some of these documents include:

 

  • Proof of employment
  • Proof of income
  • Tax documentation
  • Place of residence
  • Bank account statements
  • Credit information
  • Monthly expenses

 Is pre-qualification enough?

Pre-qualification is different than pre-approval. A mortgage pre-qualification is an estimate of how much the lender thinks you could be eligible to borrow based on your basic financial information. So no, pre-qualification is not enough. Pre-qualification can help give you an idea of how much you might be able to borrow, but errors on your credit report and other issues can get in the way of that. The lender is only showing you the loan that they believe you could be approved for if everything checks out. Pre-approval is much more involved than pre-qualification and gives you a more solid figure.

Why should I get pre-approved?

Getting pre-approved for a specific loan amount will give you a more accurate idea of how much home you can afford. It can also make your offer more attractive to sellers because he or she will know you are only a few steps away from obtaining an actual mortgage. Pre-approval can also help speed up the underwriting and loan […]

13 04, 2017

Refinancing: Is It Right For You?

April 13th, 2017|Blog|

It is no question that mortgage rates are still low right now, the real question is how long are they going to stay like this? Well unfortunately there is no exact answer for this but rates are looking to increase by this year. So would this be the right time for you to refinance? Let’s start with the basics.

What is refinancing? Refinancing is the process of obtaining a new mortgage in an effort to reduce monthly payments, lower your interest rates, take cash out of your home for large purchases or change mortgage companies. The reasons for refinancing are explained further below:

Securing a Lower Interest Rate

With rates being as low as they are now, refinancing might have crossed your mind. This is one of the most common reasons people refinance. The rule of thumb used to be that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, some believe that even 1% savings is enough of an incentive. Reducing your interest rate will lower your monthly payments and also increases the rate at which you build equity in your home.

Shortening the Loan’s Term

When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another loan that has a shorter term. If you currently have a 30-year fixed-rate mortgage, this could be a great chance to switch to shorter term mortgage. If you can afford a slightly higher monthly payment, it will be worth the change because you will save money on interest in the long run.

Converting between Adjustable-Rate and Fixed-Rate Mortgage

While ARMs start out offering lower rates than fixed-rate mortgages, ARMs are not locked into certain rates like Fixed-Rate Mortgages are, so therefore it is likely their rates have […]

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