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Getting preapproved requires that the lender review
your finances,confirming pay stubs, tax records,
credit accounts, bank statements and sometimes more.
The preapproval amount will not only be a reliable
estimate of what you can afford, but your preapproval
also indicates that a lender is willing to do business
with you, pending the purchase price, market appraisal
and the underwriting process.
You can also get prequalified for a loan, which means
that a lender has taken some information from you,
and made a tentative decision without necessarily
verifying any of the information. Prequalification
provides you with a quick estimate of the amount you
can afford, but is not considered as reliable as preapproval.
Your real estate agent should have a mortgage
broker they are willing to put you in contact
with — this lender will be someone they
have done business with in the past, and feel
comfortable recommending. However, if you decide
to do a little comparison shopping and look
for a lender on your own, here are a few important
questions to ask.
- What loan programs do you offer and which
one do you think is best for me?
- How long will the loan approval process
take?
- What line items of the loan agreement —
if any — are negotiable?
- What is your policy for locking in interest
rates, and will you honor a lower rate if
it declines during the lock-in
period?
- Are there fees for prepaying on my loan?
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