Knowing the difference between home loan terms such as pre-qualified, pre-approved and loan commitment will give you a quick insight into how smoothly your home buying contract will be initiated. Will a bi-weekly mortgage payment plan assist you in paying off your home’s mortgage more quickly? Sure it will but knowing when to make this move could help or hurt your financial situations. Have a question about loans? Check my FAQ section here.
Pre-Qualified: This term is used when you are first inquiring about obtaining a home loan. Being pre-qualified does not approve you for a home loan. Lenders will take a basic and quick look at your financial situations and decide if your are eligible to actually be approved for an official home loan. This process is fairly quick and doesn’t require you to provide your social security or drivers license information nor does it require you to provide actual account statements or other in-depth personal information. Being pre-qualified does not approve you for a home loan. Once you feel comfortable with loan prequalification you can then ask a licensed loan officer to review your legal documents and personal information to move to the pre-approval process.
Pre-Approved: After your preferred mortgage officer runs your credit, reviews your financial situations and confirms that your provided financial data is in good standing they will grant you a pre-approved status at the amount you requested to be borrowed. This status normally will be paired with an official pre-approval letter that you will present to your real estate agent so that he or she can speed up the process of purchasing a home. Being pre-approved for a loan is an important step in buying a home so you will want to make sure you contact your best local loan company for assistance.
Loan Commitment: Loan Commitment is normally confused with pre-approval because they are very similar in definition. This is the most important step in acquiring a home loan because it gives you the actual commitment stating the exact terms and interest rate details that the pre-approved loan amount is maxed at. You can look at ‘loan commitment’ as a detailed explanation of what your pre-approval confirmation includes. It is important that you understand the terms before signing off on the loan being offered by the qualifying mortgage company you are working with.
RELOCATING TO FLORIDA: Relocating to the Pensacola & Destin, FL area? CLICK HERE FOR MORE INFO!
No listings have been posted yet.