Women's Health Bag
online mortgage

Online Mortgage Application; Why You Need a Better Mortgage

Going online to fill out an Online Mortgage Application can save you time and money. It’s easy, just go online and fill out what is usually a short application and in a matter of minutes you can be Pre-Qualified for a home mortgage. Do you know the difference between getting Pre-Qualified and being Pre-Approved? It’s important that you know the difference.  Important here is that you understand the difference between a “Pre-Qualification” and a “Pre-Approval”. The following is a brief description of what each is.

Why is it important to get Pre-Qualified for a Home Mortgage or an Online Refinancing Loan? Simple, it saves time and money. If you want to get the best out of the financing process when trying to find a Better Mortgage, you must begin by laying the proper groundwork. Those that do their homework will end up with the home of their dreams and a home mortgage that fits their budget and saves them money.

There are many online mortgage and mortgage referral companies like iWantaBetterMortgage.Com. Some have better reputations than the others. Without proper preparation, (prior planning prevents piss poor performance) many borrowers believe that if the lender says that they (the borrower) are pre-qualified for the mortgage this means that they have been pre-approved. There’s a big difference between these two terms, and they are not interchangeable.

What does it mean to be Pre-Qualified?

When a lender tells you that you are pre-qualified, what they are really saying is that you have made it past their initial step in the mortgage process most all borrowers will pass this step. It’s not time to get excited yet. In order to get by this step, a borrower usually supplies the mortgage lender with your financials. The lender will review this information and can let you know if you meet their basic guide lines for a mortgage. In most cases you can get Pre-Qualified for a mortgage over the phone or on the internet, and there is usually no cost involved. Of the major online websites, we recommend; www.iWantaBetterMortgage.Com. In the initial pre-qualification, you will need to discuss with the lender exactly what you are trying to accomplish with the loan. Is it tailored or best suited to your current needs? What is your goal and expectation between you and your lender? With this information, the lender will be in a better position to explain the different types of mortgages available which can give you a good comparison. Remember, each borrowers needs are different and you must calculate just how much of a mortgage you can really afford. It’s like going to a buffet, you usually add more to your plate than you can reasonably eat. You need to understand the differences between all the various types of mortgages.

Because getting pre-qualified is a quick procedure, and only based on information you have provided, your loan amount may not be a sure thing. It’s because of this an Online Mortgage Pre-Qualification does not carry the same weight as being pre-approved.

What does it mean to be Pre-Approved?

Getting pre-approved is the next step, and it tends to be much more involved. An Online Mortgage Pre-approval means that they have pulled your credit record and scored your application against their credit granting criteria. Subject to submission of a satisfactory contract and the inspection and appraisal of the home, your loan application will be approved as long as you have sufficient down payment and the loan is at or less than the maximum amount that you are approved for.

Many sellers will not entertain offers unless you have been pre-approved for a mortgage loan. I am selling a home right now and refused offers from two potential buyers who didn’t even have a pre-qualification letter, let alone a pre-approval letter. I have a qualified offer that’s in escrow now and we should close within the week. Neither of the two who made earlier offers has been pre-qualified or pre-approved as of yet according to my agent. Had I considered their offers, I’d have been wasting my time.

You’ll complete an official mortgage application (and usually pay an application fee), and then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. From this, the lender can tell you the specific mortgage amount for which you are approved. You’ll also have a better idea of the interest rate you will be charged on the loan and, in some cases; you might be able to lock-in a specific rate.

With a mortgage pre-approval, the lender will usually provide you with a conditional commitment letter in writing detailing the loan amount so that you begin the process of finding a home at or below that price. By having the mortgage pre-approval, you will have an advantage when dealing with any seller. This also helps in the negotiation process because the seller knows that you are that much closer to qualifying for the final mortgage. But, the most important part of getting pre-qualified for a mortgage loan is that you will actually know in advance how much of a house you can afford. When you are in the home buying process, it’s best that you do not waste any time looking at homes that are beyond your price range. The online mortgage pre-approval process also allows you to move fast when you find the home of your dreams. The seller will like that you are pre-qualified because when you make them an offer, it won’t be contingent on obtaining the financing. This fact alone will save everyone valuable time because in a competitive market, the seller will know that your offer should be taken seriously.

Getting the Final Loan Commitment Letter.

Now that you have gone through the pre-qualification and pre-approval process, the final step is the “loan commitment”. This is when the bank has approved you, and has also appraised the house you want to purchase. Please keep in mind that the house will need to be appraised at or above the sales price. What should be the final step is a home inspection. A home inspector will check for structural problems, accessibility issues, liens or litigation in progress. Further, the lender will pull a final credit report to make sure your credit profile hasn’t changed since the initial approval. After these steps, the lender will issue the commitment letter which is usually is issued only when the bank is certain it will lend, so the commitment date on your purchase contract should be closer to closing than to the date of your offer. (The seller can ask to see that letter as soon as the date has passed, so beware of anyone who tries to put an early commitment date into your contract).

One Last Word

It’s extremely important to understand that being pre-approved and pre-qualified for a loan are not the same thing. Do not like this cause you to miss out on getting your new home. There are some very good websites that will start you in the right direction to fill out an online mortgage application to become pre-qualified.

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