Nancy Castagliuolo
Premier Homes Realty
282 Phenix Ave
Cranston, RI 02920
Phone: (401) 323-3475 Mobile: (401)323-3475 Email Nancy

Pre-Qualification and Pre-Approval


Many buyers apply for a loan and obtain approval before they find the home they want to buy.  WHY?

 

Pre-Qualification:

  • Determining a potential borrower's ability to qualify for financing. 
  • Buyers are asked specific questions and are provided with an amount they may qualify for.
  • Builds credibility for a buyer and gives weight to their offer.

Generally interest rates are locked in for a set period of time.  You will know in advance exactly what your payments will be on offers you choose to make.

You won't waste time considering homes you cannot afford.

                                                                                                  

Pre-Approval:

  • Determining a potential borrower's ability to qualify for financing. This process is much more involved.
  • The borrower will provide proof of income, assets, and liabilities and this information will be verified by the lender.
  • Because of this verification, pre-approved buyers are much more attractive to sellers than pre-qualified buyers.

A seller may choose to make concessions if they know your financing is secured.  This may make your offer more competitive if other buyers are making offers on the same property.  You can select the best loan package without being under pressure.

 

How Credit Affects Buyers

  • When a buyer looks for a house and needs help financing it, lenders will review their credit report.  A credit report is a history of how one has managed their finances and repaid debt.
  • When applying for a mortgage, the lender may request a credit score, also known as a FICO score.  A credit score is a generated number that indicates ability and willingness to repay dept based on credit record.
  • FICO stands for Fair Isaac Credit Organization, the organization that developed the formulas used by credit bureaus to calculate credit scores.  To learn more go to www.myfico.com
  • A buyer's FICO score is part of the mortgage information that will dictate whether or not a buyers application is approved.  It may also be a factor in determining the interest rate they will qualify for.

The three Credit Bureaus

Experian:   www.experian.com

Equifax:  www.equifax.com

Trans Union:   www.tuc.com