What Is Pre-Qualify And Is It Good For Me?
Keywords: Mortgages, mortgage, uk, home loan, loans, loan, uk, compare, adverse, credit, debt consolidation
One of the first things you need to do when you are considering buying a home is to determine how much home you can afford. What this means, really, is how much money will the lender allow you for your loan. An outstanding way to do this is to either get pre-qualified for the loan amount or (better yet) get pre-approved for the loan amount from the lender. There is a difference between pre-qualify and pre-approve, and this article will examine both of those.
Pre-qualification
Pre-qualification is a little like a practice run through the loan application process. You will supply the important details of your credit and employment history to the lender and the mortgage lender will use those details to determine how much money you can afford in your loan. This is only an estimate, of course, but it gives you a very good sense of how much house you should be looking for, based on price. The pre-qualification process may take only a few minutes, or a few hours at most, and there is usually no charge for this service.
It is good to keep in mind that even though a pre-qualification is not binding on the lender it can be used as a very good indicator to the seller that you are serious and that you are creditworthy. The reason pre-qualify results are not binding to the lender is that your details have not yet been verified. However, if the information that you gave to the lender is true and accurate, you can expect that your loan will be approved for around the amount that you were quoted by the lender.
Pre-approval
Pre-approval may begin with pre-qualification but it goes further. In pre-approval, the lender will verify your information. The lender may contact your employer, your bank and other sources to verify your income, assets, credit history, and current debts. The lender will then issue you a letter stating that your mortgage is approved for a certain amount of money within a certain amount of time. When you show this letter to sellers they know that you all but have the money in your pocket and they will be much more willing to negotiate with you than with someone who walks in empty handed.
Another benefit to pre-approval is that you know, up front, the amount of the loan that you can get from the lender. This may allow you to look at more homes, some of which you may not have believed were in your price range. It also gives you great leverage when making a deal with a seller. If a seller’s price is just a bit more than what your loan letter says you can get, he or she may be more willing to drop the price to match your loan limit. All in all, being pre-approved for a home loan is a great way to get started.
It should be noted that in some cases, you may be charged a small fee for pre-approval. There may be fees to cover the cost of your credit reports and your application.
An important side note: If your financial circumstances change before closing, make sure you notify the lender, as your pre-qualification or pre-approval results may no longer be valid.
Peter Kenny is a writer for The Thrifty Scot, please visit us at www.thriftymortgages.co.uk and www.thriftyscot.co.uk
Previous Articles Highlighter:
Are You Using Your Section 125 Wisely? (1)
This amounts to a savings of $28.85 per week to $46.15 per week depending upon your tax bracket. This is some pretty hefty savings over the course of one year ranging from $750 to $1,200.
Free Credit Report - Be Warned (2)
Or you may be interested in what other information is important to know when accessioning your free credit report. Credit reports are essential now days, they not only help you get valuable information on your financial history but they also enable you to check status of these records and correct nay incorrect information.
Your Quick And Easy Secured Loan Guide (3)
Credit reference agencies provide a detailed analysis of your financial position as they hold information relating to your credit history, any adverse credit and any existing commitments. They will look at your past credit history and take into consideration any adverse credit such as mortgage arrears, defaults or county court judgements.
How To Save Money On Utilities (4)
The heating system appliances are the ones that consume too much electricity. The refrigerator and the water heater consume that much energy as well. Make sure to check these items regularly to ensure their efficiency.
Consumers 'Sleepwalking' Into Financial Difficulty (5)
Mark Dawson writes for Loan-Arrangers .co.uk where visitors can compare cheap loans online. Then apply for the best low rate loans and bad credit loans available. Visit today www.loan-arrangers.co.uk
What Are Mortgage Points? (6)
This is a good way to get fast information on points and how they can affect your loan in the long run. Peter Kenny is a writer for The Thrifty Scot, please visit us at www.thriftyscot.co.uk and www.thriftymortgages.co.uk
Why Your Credit Report Is Hurting You (7)
With credit reports being such an integral part of getting goods and services in today's modern world, is it something you can afford not to do? You need to take control of your credit history!
Bank OF England Chooses To Maintain Base Rate (8)
Pricing in the mainstream market is stable and fixed rates have started falling recently, but there is still uncertainty about how long it will take for stable funding to return to the sub-prime market.
Tips For Saving Money On Auto Insurance (9)
Keep in mind, though, when you give them your information you will likely start getting contacted, either through email or by phone, so make sure to read the fine print and opt out of any mailing lists.
Retirement Planning With Stocks & Mutual Funds (10)
Stocks can be daunting since there's always the risk that the company won't be profitable and you'll lose your investment. When retirement planning, the AARP recommends investing for the long haul in companies that are likely to succeed (instead of trying to "time" the market) and invest small in many different stocks to minimize risk and maximize returns.
Forex Training - A Career Changing Decision For Investment Success (11)
The irony that there seems to be a process that forex traders need to go through at first whereby actually the most important forex training that could be available to them, is in fact that which seemed so simple that it was not the best out there, however once learned as to how it can be applied in trade in the market, you don't really need anything else.
FOREX Trading Market And Trading Platforms (12)
The VT Trading Systems LLC, makers of GFCurrency, places a chart device for your convenience. It is aware that most traders use this chart in arriving at their decisions almost hundred percent of the time so it is made readily available.
Parents 'Getting Personal Loan To Fund University Costs' (13)
An estimated two-thirds (67 per cent) of consumers are ready to go without a new kitchen or bathroom, while 66 per cent are set to postpone getting a new conservatory, with a competitively-priced home improvement loan a potentially wise option for people wishing to make such renovations in the future.
Consumer Credit Report - Do You Know What Yours Says? (14)
It's essential you know how lenders will read and give weight to different parts of your Credit Report: The American company FiCO has a tool that helps credit bureaus determine your credit score - below is the matrix that is used: Payment History 35% Amount Owed 30% Length of Credit History 15% New Credit 10% Types of Credit Used 10% Such companies know exactly what can be challenged as well as how to do it and who to contact about your credit.
How To Profit With Forex Currency Trading (15)
This analysis is mostly based on that specific currency's performance in the past and involves studying the factors that can influence the price and movement of a currency. These factors may include, but are not limited to, changes in Government, war, crises, and other world incidents that can change the supply and demand of the currency as reflected in the forex market.
Some Key Things You Need To Know When Applying For Automobile Financing (16)
You're eligible to obtain one gratis credit report each year thanks to United States federal legislation that came in effect a few years ago. All you have to do is go to www.freecreditreport.com and ask for a copy of your report.
Edgewater - Living The High Life In Galveston County (17)
The city of Webster will never be quite the same as Edgewater begins to fill up with those who will call this waterfront community home. This peaceful community is designed for the diverse needs of residents, with homes prices from between $200,000 to $2 million, all done in a beautiful English Regency style architecture.
Bureau Credit Report - Key Tips (18)
A Report will provide you with information about your own Credit History. This will typically includes the following: All past and present loans, such as House and Car loans.
How To Avoid Credit Repair Scams (19)
The company that tells you this will either take the money and run or will make a weak attempt at a resolution and then charge you anyway. No debt can be erased from a record unless it's proven to be false or it's too old for it to be still listed on the reports.
Some Reasons For Bad Credit (20)
For instance if you come home one day to find that your car has been taken from you, it's safe to say that your credit will be affected. If you come home to find that your home is now a part of the government's property, chances are that your credit is suffering.
Newer Articles Highlighter:
New Home Builders In Atlanta Are Ready To Build Your Dream Home (1)
Some of the golf communities offer both gated and open neighborhoods, such as the new community at Laurel Canyon near Canton. Here you can find that the new home builders in Atlanta have built two communities - Long Leaf is the open community and Seasons is gated for the 55 and older who are still very active.
Advice On Saving Money (2)
We browse the net, find experts to give the best way to save money, listen to television or radio program who are discussing tips of saving money. You are eager to hear advice on saving money.
Real Estate Opportunities Awaiting In Colorado (3)
While buying a property in Colorado it must be kept in mind that the larger cities are bound to have higher prices. But for those who want to stay away from the hustle and bustle of the larger cities they can choose to buy a property that is at commuting distance.
Borrowers Advised To 'Scour The Market' When Taking Out A Loan (4)
Figures released by the firm revealed that those opting for a personal loan from Bradford & Bingley and the Derbyshire Building Society could have the greatest rise in financial difficulties as they will find that they could pay an extra 290 pounds 52p and 270 pounds 72p respectively, on a 5,000 pounds loan payable over a 36-month period.
Advantages And Disadvantages Of Adjustable Rate Mortgages (5)
In general, an adjustable rate mortgage begins with a set rate of interest for a specific length of time. This first rate is usually lower than what consumers can find in the fixed rate market at the same time.
How Did I Lose Money On My Bond Investments? (6)
However, you should also take into account the risk factors we have covered. Your portfolio should contain a mix of corporate, federal, municipal, and even junk bonds (there is always a default risk associated with junk bonds, but they pay a huge interest rate).
The New Home Builders In Houston Create Functional Art (7)
Keywords: Houston luxury homes, Texas How many people can honestly look at their home and determine that their house could be considered functional art? If you are lucky enough to own one of the houses created by the new home builders in Houston, chances are your house is right up there with some of the most exquisite artwork.
How Does Forex Software Work? (8)
You may only be able to access and trade with it using the computer on which it the application is installed. Another concern regarding this type of forex software is the issue of security.
Bad Credit Student Loan - A Real Trap? (9)
Firstly lets look at Student loan consolidation A student who currently have loans being either a single student loan or a number of student loans have a range of different options to reduce repayments and debt and keep a wide birth from ending up with a Bad Loan.
Discussing Basics Of Forex Markets (10)
This is specifically can be used when you get into this business. The The foreign exchange, or forex market is basically young, compared to other form of stock market business.
Credit Report - The Fast And Legal Way To Fix Yours (11)
Ask you broker about these services - sometimes it can take two weeks but it sure is still a faster process than the old snail mail. To get a Credit Report today or access more information visit www.credit-reporter.net
Car Insurance Costs 'Set To Rise Further' (12)
He added that those looking to take out a loan to fund the purchase of a vehicle should not only ensure that they will be in a position to meet monthly demands for payment, but also that they can afford to cover the day-to-day running costs.
Home Staging: Curb Appeal Is What Invites Prospective Buyers Into Your House (13)
Go outside in the street and stand back and look at your home. I mean REALLY look at your home. If you were looking to buy this house again, would it appeal to you?
Brits 'Not Thinking Enough' About Finances (14)
In addition, Baring Asset Management also showed that 3.2 million Britons (seven per cent of the adult population) are set to rely on property investments to fund their retirement. However, Marino Valensise, chief information officer for the firm, warned that "placing all your eggs in one basket" is a risky strategy as such consumers are left open to potential movements in the property sector and changes to the base interest rate.
It's Back To The Future For Real Estate (15)
Roselind Hejl is a Realtor with Coldwell Banker United in Austin, Texas. Her website - www.weloveaustin.com - offers homes for sale, market trends, buyer and seller guides. Let Roselind help you make your move to Austin.
How Do I Shop For The Best Mortgage Rates? (16)
At times, these fees can be incredibly high. On a brighter note, there are many online calculators that you can use for free to help you learn more about the cost and payments of a particular mortgage rate.
How To Pick The Right Auto Loan (17)
The second factor that may affect the total cost of your car loan is your credit rating. Creditors with less-than-stellar credit history are usually charged a higher interest rate because of the elevated credit risk.
Is The Florida Real Estate Market Over? (18)
In other words, for buyers and sellers alike, being involved in the Florida real estate market will again be a positive experience. Lance Mohr is your Tampa real estate expert, with over ten years of experience in real estate sales and has been investing in real estate for over 18 yrs.
Shopping Money Saving Tips (19)
Stores will start to mark down the prices of items that are soon to expire later on the following days. And, again, taking advantage of this opportunity can contribute great for you to fulfill these grocery saving tips.
What Is Foreclosure And How Can I Avoid It? (20)
There are many options for those who find themselves in financial trouble but it is up to you to take the actions that will help prevent foreclosure on your home.