Are you in the beginning stages of buying a new home, and wondering what initial steps you should take in order to obtain a mortgage? You have probably heard that getting preapproved for a loan and being prequalified for a mortgage can give you an advantage over other potential buyers, but what do these terms mean? If you are interested in purchasing a home in Jacksonville, Florida, and want to better understand the process of loan preapproval and prequalification, contact North Star Mortgage Network, Inc. for a consultation.
Step One: Prequalifying for a Home
Prequalification and preapproval are often used interchangeably, however, there are differences between the two terms. Prequalifying for a mortgage is the first step in purchasing a home and gives a borrower a general estimate of the loan amount they can qualify for. The prequalification process requires you to provide your financial information to a lender, such as your income, your current amount of debt, and other assets you may have so you can get an idea of how much money you will potentially be able to borrow. Prequalification usually is based solely on the information you provide and doesn’t require an official credit score. Therefore, you will want to make sure that you provide the lender with accurate information so you can get the most reliable understanding of the price range you will be able to afford. You and your lender can discuss your housing and payment options during the prequalification process, and it is usually free and can be completed over the phone or even online.
Step Two: Mortgage Preapproval
After prequalifying for a mortgage, the next step is to get loan preapproval. This is a more extensive examination of your current financial situation. To get loan preapproval, you will need to provide verification of your income, debt, additional assets, and information about your monthly expenses. You will also be required to complete a mortgage application and complete a credit report. Once you satisfy all of the requirements, you will receive a preapproval letter, which will help you get a better idea of the type of interest rate you will be able to receive. Then, when you are ready to make an offer on a home, you can provide the seller with your preapproval letter, which demonstrates to the seller that you are serious about purchasing the home, giving you an advantage over other potential buyers.
Get Help Today With Loan Prequalification and Preapproval
If you are ready to take the initial steps to buy a home in Jacksonville, Florida, contact the loan specialists at North Star Mortgage Network, Inc. today. We can work with you to help you better understand the mortgage process, and help you purchase your ideal home.