A primary home mortgage loan is simply a loan that is secured by real property.
Your mortgage payment can include principal and interest, or you can
arrange to include a specified amount for an escrow fund from which taxes,
homeowners insurance, and special assessments are paid. Generally,
mortgages must be repaid in 10 to 30 years.
Mortgage
Alternatives
You have two alternatives for applying for a mortgage:
The traditional option,
where you meet with a mortgage broker or loan officer at a bank or
mortgage company and that person takes you through the entire process.
The Web-based
HomeLoan.com option is an online mortgage lender and mortgage broker.
You can explore the various mortgage programs, learn about the
mortgage process, and use the free calculators to help you
decide how much you can afford and which mortgage options are best for
you.
Prequalification
To prequalify for a loan means that based on preliminary
information about your income, assets, and financial obligations that you
provide, you seem to be a good credit risk. You can receive a
prequalification letter, which will tell a realtor or potential seller how
large a loan of a particular type that you qualify for.
After you know how much loan you can qualify for, you can
print out a prequalification letter. When you show this letter to a
realtor, you'll be taken more seriously as a buyer.
BOTTOM LINE: This will give you the edge over a
prospective buyer who is not prequalified!
Preapproval
Preapproval means that the lender has received your credit
application and proof of income, asset, and liability. With the information
that you provide, your broker will have two questions in mind. Do you
indeed qualify for the type of loan that you want, and will your
application pass smoothly through the underwriting process. With a
preapproved loan, you can close the loan quickly.
BOTTOM LINE: An anxious seller will sometimes reduce
the asking price for someone who is preapproved and can close quickly.
