Why should you get pre qualified?
The process of prequalification allows you as a potential home buyer to be taken seriously by the real estate community, and by the person who is selling the home you want! Getting prequalified is a service we provide free to you as a potential home buyer. You're not obligated in any way. Of course, if you do purchase a home, we trust that you will give us your business.
The real estate agent you select wants to know that you have the capability to buy a home and what price range you can afford. Completion of a prequalification includes an analysis of your income and liabilities and a preliminary credit check. After prequalification, we will provide you and your agent a letter, which will state the amount for which you qualify. The letter is NOT a loan commitment; it merely implies that your credit history and income are sufficient to obtain a loan in that amount.
This letter should be included when you submit your offer to buy the home that you want. The listing agent will generally ask for this letter if it is not included. The listing agent will use this letter to assure the seller that the offer is supported by a lender's assessment of your financial ability to obtain financing.
The information that you complete on this form is held in strictest confidence and not provided to any agency or person. It is used strictly to support your prequalification. This information is the absolute minimum necessary for us to determine your qualification. This letter does not constitute a fully approved loan.
How is this different from Pre-Approval?
This process enables you to have a loan already approved to expedite the buying process. This is a formal loan application that must be completed in order to get a loan whether you have been pre-qualified or not. This step implies intent on your part to use us as your lender.
At the time we receive your formal loan application we will also request certain documents from you in order to validate the information listed on your loan application. We will access your credit history by obtaining a credit report. The majority of our loans receive approval through an automated underwriting system. We will ask for copies of pay stubs and bank statements. We may also ask for copies of W-2 forms and tax returns depending on the source of your income. The findings of the automated underwriting system will determine the documents we must request. Once the requested documents have been provided our local underwriter will review them and validate the loan approval.
Once we have determined the conditions of the automated approval have been met, we can issue a loan approval letter. This letter will state that you, the borrower, has been approved for a mortgage loan. You will want to provide a copy of this letter to your Realtor to be included when you submit an offer to purchase a home. This letter will be used to assure the seller that you have already been approved by your lender for financing. Once your offer to purchase has been accepted, we will then order an appraisal on the property to validate the sales price and condition of the home. With an acceptable appraisal, you are now within days of becoming a homeowner.
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