Portland first time home buyers may often feel in over their heads when starting the home buying process. Stonebridge Mortgage Group is here to help our Portland clients understand the ins and outs of preparing to buy a home.
You may have heard the terms “pre-qualification” and “pre-approval” in regard to mortgages. Although sometimes these terms are used interchangeably, there are differences between the two.
Getting pre-qualified is a simpler, more informal process than getting pre-approved. This process involves supplying a bank or lender with your overall financial picture, including your debt, income, and assets. The lender reviews everything and gives you an estimate of how much you can expect to borrow. Portland home buyers can get pre-qualification over the phone or online, and there’s usually no cost involved. It usually only takes one to three days to get pre-qualified.
Portland home buyers should keep in mind that mortgage loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. It’s based solely on the information you hand over to the lender, so it doesn’t mean much at all if you don’t provide accurate data.
A pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer, who has been more thoroughly investigated. After all, the amount a Portland home buyer pre-qualifies for isn’t a sure thing. It is only the amount for which you might expect to be approved.
Nevertheless, pre-qualifying for a mortgage loan can be useful when it comes time to make an offer. Sellers don’t want to enter into a contract with a Portland buyer who isn’t committed. Sellers will often ask about pre-qualification status. In today’s competitive housing market, having a pre-qualification letter can make all the difference.
Stonebridge Mortgage Group aims to help Portland home buyers to understand the intricacies of buying a home. First time Portland home buyers might be understandably confused by all of the different terms and phrases used in various points of the process of buying a home. For example, the terms pre-qualification and pre-approval are often used interchangeably when seeking out information about mortgages. However, they are not the same.
Our last post explains the specifics of a getting pre-qualified for a mortgage. Now, Stonebridge Mortgage Group will explain the details of getting pre-approved for a mortgage.
Mortgage pre-approval comes after mortgage pre-qualification. The process of getting pre-approved for a mortgage is much more involved. While a pre-qualification acts as a good indication of creditworthiness and the ability to borrow, a pre-approval acts as more definitive proof.
In order to get pre-approved for a mortgage, you must complete an official mortgage application and you must supply the lender with all the necessary documentation to perform an extensive check on your financial background and current credit rating. The lender will then review your finances, and can pre-approve you for a mortgage up to a specified amount. The interest rate you’ll be charged on the loan is based in part on your credit score, so this is when you’ll get a better idea of what that interest rate may be. You might even be able to lock in an interest rate. Some lenders charge an application fee for pre-approval, which can amount to several hundred dollars.
After you are pre-approved for a mortgage, your lender will provide you with a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. This gives Portland home buyers an advantage with the seller because the seller will know they are one step closer to getting an actual mortgage.
How Pre-Qualifications and Pre-Approvals Differ
The following is a brief comparison to show how a pre-qualification and a pre-approval differ:
1. Do I need to fill out a mortgage application?
2. Do I have to pay an application fee?
3. Does it require a credit history check?
4. Is it based on a review of my finances?
5. Does it require an estimate of my down payment?
6. Will the lender give me an estimate for a loan amount?
7. Will the lender give me an estimate for a loan amount?
8. Will the lender give me interest rate information?
David is so professional and accommodating. I appreciate his level of professionalism and willingness to help.
We have chosen Stonebridge a couple times now, and they are always a pleasure to do business with.
David with Stonebridge has helped me on multiple occasions, between financing a new home as well as a couple of refi's over the years. I cannot stress how communicative he is when it comes to keeping his clients in the loop. Even when there was a slight lull during my most recent refi I would receive an email just letting me know that nothing new had transpired yet so I never had to question what was going on.
I have worked in the Real Estate field for almost three decades and David is by far the most responsive and professional mortgage Broker that I have dealt with.
If you need help purchasing a new property or help with a refi you can't go wrong by hiring Stonebridge!
Refinancing our home through Stonebridge Mortgage was a great experience. They locked in a great rate, laid out each step along the way, and provided regular updates throughout the process. It couldn't have gone more smoothly and now we are saving $300/mo! Thank you Stonebridge Mortgage!
David is very easy to work with and makes the entire process very simple. I have used Stonebridge for initial purchase and refinance and it only gets better. Get the straight answer quickly from Stonebridge
I've had nothing short of an amazing experience working with Stonebridge. I bought my first home over 2 years ago and without their help I may still be living in an RV. I intended to refinance my home later this year and I will most definitely be working with Stonebridge. I highly recommend. PS, I was qualified at the time with a credit score of 640
David was wonderful to work with. He was highly recommended to me by my partner who had worked with David a few years ago.
The day I contacted David he immediately put everything in motion
to assist me in refinancing with a much better interest rate.
We were able to handle everything by email /phone and Fax. He
responded quickly to questions I had. And let me know immediately
if something needed to be done or changed.
I would definitely work with David in the future if the need arises. The process went smoother than any other time I have worked with mortgage
David was an absolute pleasure to work with! He was consistently responsive, on top of every detail and always so upbeat and funny! (An added perk that I truly appreciated during the stressful process of selling AND buying at the same time!) I will be recommending him to everyone I know!
David was a good man to do business would
do business again