17 October 2012

When you find a house you’d like to buy, you’ll have to convince the lender that this home meets all the necessary standards (e.g. the home’s proper condition or market value). Only then you can be approved for the mortgage. The lender may refuse your mortgage application, though a pre-approval for a certain amount was made.

Note that the pre-approved amount is the maximum loan amount you can receive. That’s why it’s better to search for a house of a bit lower price and not to feel too much limited at the budget.

One more important note: some lenders recently have implemented rate premium for pre-approval, so before applying for pre-approval make sure you will get the best rate at the time deal become “live”.

What do you need for the pre-approval interview?

When you decide to talk to a potential mortgage lender or broker, the following information will be quite useful:

• identification
• proof of employment
• – proof of stable salary
• – job position and the period of time you’re working with the organization
• proof of down payment
• – recent financial statements, such as bank accounts and investments
• your current debt or financial obligations
• – credit card balances and limits (store credit cards included)
• – child support or alimony amounts
• – car loans or leases
• – lines of credit
• – other loans.

Questions you should ask

• Will you automatically get the lowest rate in case the rates fall while you are pre-approved?
• How long is the pre-approved rate guarantee?
• Can you extend the pre-approval period?