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| Q. What is the difference between "prequalified" and "preapproved"? |
| A. A
prequalification consists of a
discussion between a home buyer and a loan officer. The loan officer collects
basic information regarding the customer's income, monthly debts, credit history
and assets, and then uses this information to calculate an estimated mortgage
amount for the home buyer. The prequalification is not a mortgage approval, but
estimates what a home buyer can afford.
A preapproval, on the other hand, is a comprehensive approach using basic information as well as electronic credit reporting. Preapprovals, in most cases, are true mortgage commitments. The lender commits to financing your home and indicates the total mortgage amount available to you. |
| Q. What types of mortgage programs are offered? |
| A. Currently, there are over 50 different mortgage products available, including, but not limited to: |
| ·15, 20, and 30-year fixed rate loans |
| ·Adjustable rate loans |
| ·New Construction financing |
| ·VA and FHA loans |
| ·5 and 7-year balloon loans |
| Q. How long does it take to process a mortgage application? |
| A. Usually about 45 to 60 days, although it can take as few as seven days and as long as 90 days for some transactions. The actual time depends on how quickly the lender can get an appraisal of the property, a credit report and verification of employment and bank accounts. |
| Q. What documents will I have to provide? |
| A. Be prepared to provide verification of income (including a pay stub and recent tax returns), bank account numbers and details on your long-term debt (credit cards, auto loans, child support, etc.) If you're self-employed, you may also be required to provide financial statements for your business. |
| Q. Could anything delay approval of my loan? |
| If you provide the lender with complete, accurate information, everything should go smoothly. |
| You may face a delay if the lender discovers credit problems - a history of late payments or nonpayment of debts, or a tax lien. You may then be required to submit additional explanations or clarifications. |
| Q. What's included in my house payment? |
| A. Principal and interest on your loan. Depending on the term of your loan, the payment may also include homeowners insurance, mortgage insurance and property taxes. |
| Q. Can I pay those other things seperately? |
| A. Not if it's an FHA or VA-insured loan. With most other loans, you can pay your own taxes and insurance if you borrowed no more than 80% of the purchase price or appraised value of your home. Check with your lender to be sure. |
| Q. What do closing costs include? |
| A. Closing costs cover processing and administration of your loan. In addition to a loan fee, you'll usually be asked to prepay interest charges, to cover the partial month in which you close, and impounds for property taxes, hazard insurance and mortgage insurance. |
| Q. When do mortgage payments start? |
| A. Usually about 30 days after closing. The actual date of your first payment will be included in your closing documents. |
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