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Pre-Qualification and Pre-Approval

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 26th Mar, 2004 05:53am
Pre-qualified:

Getting pre-qualified implies that you may be offered a mortgage loan. However the lender gives the confirmation only after necessary verification of the loan application. Based on your financial status, debts and credit, he makes an estimate of how much can be borrowed and what monthly payment you can afford. This however does not imply that you will be offered the loan, as there is no written agreement between you and the lender.


Pre-Approved:

Pre-approval requires that you submit a loan application to the corresponding mortgage company or lender. Depending on the mortgage company, you go through various formalities so that your loan is finally approved. The lender reviews the loan application and analyzes the risk with the help of an underwriter. Finally he issues a written commitment stating the loan amount and monthly payments. There are companies who may allow you to lock in the interest rate even when you haven't selected the house that is to be purchased. Thus you are said to be pre-approved for the loan.



It is to be noted that mortgage pre-approval does not guarantee you a mortgage loan. Actual funding will be given only after property title search, property appraisal and other verifications. Again, mortgage pre-approval is not binding. Being pre-approved does not mean that you have to necessarily take out the loan from the same lender. You can change the lender if you wish.


Posted on: 26th Mar, 2004 05:53 am
we are trying to purchse this home we live in from a famly member that has cancer and is unable to continue working
So, Jim what is your query? would you lik to discuss any of the loan options with us? Please come up with some more details.
Posted on: 18th Feb, 2008 10:02 pm
i agree james...jim & karen, we would need to know how you propose to do your purchase transaction before we could discuss your options.

in family sale situations, there are lots of favorable possibilities available to you, but we need to know more before commenting.
Posted on: 19th Feb, 2008 10:44 am
Is there a gift of equity coming from this family member?
Posted on: 19th Feb, 2008 01:50 pm
hi jim & karen julian

sorry to hear about the unfortunate circumstances that lead to this purchase. however, it does put you into an advantageous position by living in the home and purchasing from a family member. you most likely can use the equity in the property like a down payment. there is no cash transfer of any sort and just allows you to get into the home with no money down (depending on the value vs. the purchase amount). another way to do this is to be added to title and then refinance it in your name. either way, it looks like you have a couple different options that will allow you to purchase the home with no money down.
Posted on: 20th Feb, 2008 10:07 pm
My best to your family member. Someone here should be able to answer your questions when you supply more information.
Posted on: 23rd Feb, 2008 08:02 am
my boyfriend and i are looking to refi,because brandon and his ex wife have been devoriced for 3 years and she wants her name off the mortgage loan
Posted on: 10th Oct, 2008 01:19 pm
Hi bdupaquier!

Welcome to Forums!

Yes, your boyfriend can easily go for refinancing. Even lenders prefer this method. He can speak to the lender and tell the person about refinancing. The lender will tell him the details.

Feel free to ask if you have further queries.

Sussane
Posted on: 10th Oct, 2008 11:59 pm
We would like to lower our interest rate from 7.45% and lower our payments
Posted on: 03rd Jul, 2009 07:50 am
that's a great idea william. there are lots of opportunities to do so these days, if you qualify.
Posted on: 06th Jul, 2009 08:00 am
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