Search:

News by Subject
Complete list of specialty news sections.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Mortgage Industry News
Subscription-based news for people who work in real estate finance.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories for your web site or for your RSS reader.

News Archives
Archive of news entries.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Graphs
Directory of lenders, branch operators and mortgage service providers.
home advertise email RSS about us
 
HOT Topics Rates Glossary LO License Search
Consumer Mortgage News
Free mortgage news for current and prospective borrowers from a leading online mortgage industry news publication.



Prequalifying for a Home Loan

Why buyers need to get prequalified before the home search

June 19, 2017

By ALEX MAXWELL Herald Democrat (Tribune News Service)



For homebuyers about to start the process, real estate agents will say the first step is to contact a lender to get prequalified.

Getting prequalified for a home loan followed by preapproval, allows buyers to find out if they can actually buy a house, how much house they can afford and what loans are available to them. It also shows Realtors and sellers that the buyers are serious.

Vanya Griffith-Mayes, branch manager of Starkey Mortgage in Sherman, Texas, said with the local real estate market geared for sellers, buyers need to be ready to make an offer when they find the house they want.

"So if they go out and find a home that they really, really like, they would need to be able to be in a position to present an offer quickly," Griffith-Mayes said. "If they don't have a prequalification letter in hand, then if they find a house they love, they're not going to be in a position to make that offer and they would lose that house."

Often real estate agents won't show houses until the buyers are prequalified as they don't know what the buyers can afford and if they can get a loan.

"And a lot of time the Realtors don't want to spend the entire afternoon working with a client that's not qualified," Griffith-Mayes said. "If somebody is not qualified -- they have credit issues, or they can't qualify for a home loan or they don't have cash in hand -- a Realtor needs to spend time with somebody who is qualified."

Jeremy Lewis, branch manager of Grayson Home Loans, said buyers first need to fill out an application. Most local lenders, like Lewis, have applications available on their websites. He noted it typically takes about two to three minutes per person to fill out the form, and it covers the basic information like their name, social security number, income, assets, work history for the past two years and where they have lived for the past two years.

"And then I'll take a look at the credit and that helps me determine what type of loan works best for them by looking at their credit scores, and then I'll kind of consult with them," Lewis said. "After I look at their credit, I'll have a little consultation with them to figure out what their goals are, price range of house, payment range of house, and the down payment that they're looking at being able to come up with."

Griffith-Mayes said prequalification and preapproval are different. For the latter, the lender verifies the information. She said for prequalifications the lender takes only verbal information and has not examined the related documents like tax returns, bank statements and pay stubs.

"Preapproval means that the lender has actually reviewed the written documentation, has underwritten the file and verified that they make the money they say they make, and they have the assets in the bank that they say that they have, so that's the difference between preapproval and prequalification," Griffith-Mayes said.

With preapproval, Lewis said it limits the potential of surprises and hurdles. When buyers fill out the initial applications, everything could look good, but the documentation could paint a different picture. So with a preapproval, it ensures that buyers are good to purchase a house and that their offers are backed up with proof.

"So I like to make sure that I'm 95 percent sure that everything is good on the loan before we go in and start looking at homes," Lewis said. "Because I don't want to be the bad guy that has to come back and tell them, 'Hey, I know you made an offer on this house, it's been accepted -- you told your friends and your family, everybody's pumped up about buying the house -- but we got an issue.'"

Griffith-Mayes said by the preapproval and prequalification process, it allows buyers see what loans they can qualify for, which could limit or open up home options. Some loans have strict requirements on the state of the house while others may not.

Preapproval, Lewis said, also helps speed up the buying process as it helps the loan close much faster after the buyers make that offer.

"So by being proactive, and having those materials ahead of time so I can look at them -- that helps them ensure that they're going to get the house, and they're not going to run into any roadblocks," Lewis said. "On top of that, it helps speed the process up as well. It helps them get into the house much faster, and it makes it easier on them as a buyer -- through the loan process -- and on the lender as well."

next story

back to home page


To see more of the Herald Democrat or to subscribe to the newspaper, go to http://www.heralddemocrat.com

Copyright (c) 2017, Herald Democrat, Sherman, Texas

Distributed by Tribune News Service.


This story was distributed by TNS - Tribune News Service
 
Refinance News
News about refinance programs, pricing and production.
H A R P 2.0 News
News stories about the H o m e Affordable Refinance Program including expanded program guidelines.





Copyright © 2016 MortgageDaily.com
MortgageDaily.com Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

pricing engine directory

wholesale lender directory

More Mortgage News Resources (MortgageDaily.com full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

free mortgage news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

refinance news

reverse mortgage news

sales blog

secondary marketing

servicing news

subprime news

wholesale lenders

wireless mortgage news