Mortgage Pre-Qualification & Pre-Approval

By Pam Keller, Mortgage Department Manager

For first-time homebuyers, the mortgage process can be confusing. Where do you start? What price range can you afford? What will your monthly payments be? Will you be approved for a loan? These questions can be answered through two procedures: pre-qualification and pre-approval.

Pre-qualification is a simple mathematical process we use to determine how much of a monthly payment you can fit into your existing debts and income, without exceeding the limits imposed by Fannie Mae, or FHA, or other loan programs being considered. We then use the monthly payment to determine the maximum loan amount that will be the right “fit” for you. Pre-qualification is the best way to help you decide if you can afford to buy a new home. It’ll also help guide you toward homes priced in the right range.

To pre-qualify for a mortgage, you can either call the credit union or fill out a pre-qualification form online. Once you have narrowed down your search, you’re ready to get pre-approved.

Pre-approval involves an actual loan approval that can be obtained when you’re seriously looking for a house, but have not yet signed a contract for purchase. This process includes an actual loan application and credit review, and is so streamlined that approval is usually obtained the same day, often within an hour or two!

A pre-approval is subject to some conditions pertaining to the home that is subsequently selected, such as the appraisal, survey, and title insurance. But once pre-approved, you can make an offer with the assurance that you are already approved for the loan.

If you’re ready to be pre-qualified or pre-approved for a mortgage, call Marlynn Murray or me in the Mortgage Department at 850.942.9234.

+ E-mail the Mortgage Department