What are the differences between pre-qualification, pre-approval, and final approval?
Pre-qualification — A pre-qualification provides you with an idea of how much you can borrow based on the income and debt information you provide the Finance Home America home mortgage specialist. At this stage, the information you provide the home specialist may not be verified, and the pre-qualification serves only as an estimate of how much you might be able to borrow.
Pre-approval — In some cases a pre-approval can be determined if you present proof of your income and liquid assets. A pre-approval can give you more bargaining power when you are ready to make an offer on a home because the seller can be confident that you will be actually be able to purchase the home. A pre-approval can also give you the piece of mind that you will be able to obtain the loan you need in order to purchase the property you have selected.
Final Approval — After the property is appraised, all required documentation is collected and reviewed by the underwriter, and all conditions are met, a final approval is issued. Once your loan is approved, you move into the closing stage.
What factors determine if my mortgage gets approved?
Several factors are considered when determining if your loan will be approved.
Funds — Do you have enough money to cover closing costs and down payment? Do you have enough money left after closing to cover your immediate expenses? Do you need gift money?
Income — Do you have the income to cover your mortgage and other debts each month?
Credit history — Does your credit history show that you pay your obligations on time?
Appraisal — Does the value of the property you want to purchase support the loan amount for which you’ve applied?
How long will it take for my loan to get approved?
In many cases, loans are approved the day of the application and verification of the information you’ve provided, subject to an appraisal. How you prepare for the application can have an impact of how long it takes the lender to approve your loan. See Application Checklist for details about the information you will need to provide.
I don’t have a lot of money for down payment. Can I still get a loan?
Yes Finance Home America offers many programs that require little money down.
What documents will I need to provide with my application?
You will need to provide information about your assets and debts, employment information, and information about the property you want to finance. This information is necessary for Finance Home America to evaluate your loan file and make a final approval. For a complete list of information you should be prepared to provide, see the Application Checklist.
Can a person who has filed bankruptcy get a home loan?
Yes. Some programs require a waiting period as little as one year from the date of discharge before you can obtain a mortgage.
Do you finance mixed-use/multi-family properties?
Yes. This is where our experienced home mortgage specialist and underwriters prove their worth. We are able to determine quickly if a property is eligible. Sometimes, we will have to obtain an appraisal to make a definitive decision.
What is credit scoring?
Your credit score, or FICO score, is one factor the underwriter considers when evaluating your loan file. A credit score is a single number supplied by credit bureaus that is useful for predicting a person’s ability to repay a loan. Credit score calculations are based on a model developed by Fair Isaac Company, hence the term FICO. The FICO score is determined by your credit history, past performance, how long you’ve had credit, what types of credit you have available, your current level of debt and how much credit you are currently seeking.