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Prequalifying and pre-approval There are the first two steps in applying for a mortgage loan. First, a lender or mortage broker pre-qualifies you. Pre-qualification determines whether you have the financial resources to match the size of loan you are requesting. Information is often not verified at this step. It is a preliminary step to screen your viability as a loan applicant. Pre-approval is the next step. A lender's pre-approval is a limited-time commitment to fund your mortgage loan. A pre-approval may include an interest rate lock. To obtain a pre-approval, a lender evaluates your credit history, and calculates your housing and debt ratios. You should expect to verify your income, length of employment and source of down payment. For non-residents Stated Income and Stated Assets are required. A pre-approval legitimizes you as a serious buyer. It also gives you additional negotiating leverage to negotiate a sale price, especially if the seller cannot find other pre-approved buyers. When seeking a pre-approval, it's important not to misrepresent the facts on your application. If a lender learns later that you've misrepresented or omitted information on your application, your pre-approval may be rescinded. As part of the pre-approval process, a lender obtains your credit report. You should be familiar with the contents of your credit reports from all three major credit bureaus: Equifax, Experian, Trans Union. If a lender denies your pre-approval, you should investigate immediately. Without a pre-approval, your chances of obtaining a mortgage loan are jeopardized. If a lender bases the decision, in part, on information in your credit report, you have the right to receive a free copy of the report. FOREIGN NATIONAL LOAN PROGRAM ● Up to 75 percent loan to value |
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