When it comes to financing your home purchase a home mortgage or home loan is the most common option. When using a mortgage to purchase property there are two steps that you should be aware of: the pre-approval the mortgage.
A mortgage pre-approval is what you will want to obtain early in the home buying process. Obtaining a mortgage pre-approval will help you determine in advance if you are approved for the mortgage amount you need before start your search. Most sellers require a pre-approval before allowing you to bid on a property. Usually only one approval letter is needed. The reason is your loan officer is using an automated system to determine eligibility for the two primary loan options: Fannie Mae “conforming” or FHA. The same system is used by all banks, so once you are approved for a loan, there is no reason to apply again. Click here to learn more about mortgage pre-approvals.
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Once you have a pending agreement with the seller, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. This means finalizing your down payment, interest rate, regular payment schedule and any other financial conditions associated with the closing.
There are myriad loan types and programs available through thousands of banks, finance companies, credit unions, and other assorted lenders. Not surprisingly, there are just as many sources of information about mortgages. Books, news articles, seminars, mortgage brokers, lenders, and knowledgeable agents can all help you make your way through the labyrinth of financing possibilities, so make use of them and be sure to get a few opinions. Click here to learn about the some of the different types of mortgages.