Ask the Expert-Associated Bank

Wed
10
Apr

What are the differences between mortgage prequalification, preapproval and final loan approval?

Prequalification is the process where the lender will look at a basic copy of your credit report and use the information you supply to determine how much mortgage you can afford based on your income. No accounts or employment information is verified. Preapproval occurs when all credit and employment is verified and the mortgage is approved, subject to the appraisal of the property you have chosen to buy.

Thu
21
Mar

If I had sold my home in a “short sale” how long do I have to wait to be eligible to purchase a new home?


Kathy Aiken

Fannie Mae views a short sale the same way as a foreclosure, where you would have to adhere to the “seasoning” rule. If you have 20% to put down on the new home, you cannot apply until a full two years has passed. If you have less than 20% down, you will have to wait for four years.

 

Thu
21
Mar

I see many foreclosures and short sale properties listed on the market, is that a good way to go?


Kathy Aiken

There are some good deals out there in respect to foreclosures and short sales, however keep in mind if the property needs repairs. Some repairs need to be made prior to the purchase, for example missing plumbing or roof issues. The process of purchasing this type of property can be longer and often more complicated, therefore, you want to make sure you have a realtor selected that is knowledgeable in this area.

Thu
21
Mar

Does it make a difference if my mortgage is sold as soon as I purchase a home?


Kathy Aiken

What a “sold” mortgage means is that the owner is still Fannie mae but the financial institution which closed your loan will not be handling the payments and other services related to your loan. For most customers, they want the current lender to be their servicing agent. Therefore, they can make their payments to that financial institution rather than mailing them to a company outside the state.

Thu
21
Mar

What are the differences between mortgage prequlification, pre-approval and loan approval?


Kathy Aiken

Prequalification is the process where the lender will look at a basic copy of your credit report and use the information you supply to determine how much mortgage you can afford based on your income. No accounts or employment information is verified. Preapproval occurs when all credit and employment is verified and the mortgage is approved, subject to the appraisal of the property you have chosen to buy.

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