If you are serious about looking for a home to buy, it is very helpful and important to get pre-qualified, and then pre-approved from a reputable mortgage lender. There is a difference between these two processes.
Pre-qualification is the first step in obtaining mortgage financing. You, as a potential borrower, answer a few questions to provide the loan consultant with a quick snapshot of your income, existing debt, accumulated savings and whether or not there is a co-borrower. Your signature allows the loan consultant to run a credit report and begin to determine which loans are good candidates for you. There are literally thousands of loan programs available. It is important for the loan professional to know what your long-term financial objectives are.
Pre-approval is a written documentation that proves that you, the borrower, have full support of a lender. It means the form 1003 Uniform Residential Loan Application has been completed and reviewed by an underwriter. Based on your income, debt ratio and savings, the underwriter will provide a dollar amount you are eligible for. Now you have the convenience of shopping for a home in the price range agreed upon by the lender.
Pre-approval allows potential homeowners to shop as cash buyers, and that means negotiating power! Sellers will take an offer from a pre-approved shopper much more seriously when they know the financing is in place and the deal is secure.
If you need a mortgage lender in central Alabama, here are three you might want to contact:
- Charles Bates at Renasant Bank: http://mortgage.renasantbank.com/Branch/Default.aspx?UserID=402
- Clay Pierce at RBC Bank: http://mortgage.rbcbankusa.com/clay.pierce
- Brett Shaw at Aliant Mortgage: http://www.aliantmortgage.com/bshaw.html