Get Financing – Mike Chance

Frequently Asked Questions

Q: What is a Mortgage?
A: A mortgage is a loan used to purchase a home or piece of property.

Q: Why should I try to get pre-approved for my mortgage?
A: As a pre-approved buyer, you can go shopping for a home with confidence about your buying power knowing what types of programs and payment terms are available to you.

Q: Are you really pre-approved for a mortgage?
A: Differences between Pre-Qualification, Pre-Approval and Loan Commitment. Most home buyers will hear these terms during their search for a home. Sometimes even real estate agents are confused by the terms, so it is no wonder that home buyers and sellers are, too. Although related, the three terms each signify a different level of approval from a lender:

Pre-Qualified
You can be pre-qualified by a lender, by an agent or you can do it yourself. The term means that someone has taken a general look at your income and expenses and plugged them in to a debt-to-income ratio formula. Loan pre-qualification does not typically include an analysis of your credit report or an in-depth look at your ability to buy a home. Pre-qualifying yourself before you start looking for a home will give you a general idea of the price range you can afford. It will not nail-down an interest rate for you, and that factor and others will affect the monthly payments a bank will allow you to carry.

Pre-Approval
When you are pre-approved for a mortgage, it means a lender has looked closely at both your credit report and your income and determined that you qualify for a loan. The lender will tell you the maximum amount of loan they will offer, which loan programs you qualify for and will discuss the interest rate you will be offered for different types of loans. When you're pre-approved, you can go shopping for a home with confidence about your buying power, but it still doesn't guarantee that the lender will approve the loan--that comes after the home itself is approved.

Loan Commitment
A lender issues a loan commitment after it has approved both the house and you. A home appraisal must meet the lender's guidelines, which usually includes a stipulation that the home must appraise at or higher than the sales price. Price is just one aspect of the home the lender considers. They might want to make sure the appraiser thinks the property will sell within a reasonable amount of time--in case you don't make payments and they must foreclose. A comment from the appraiser such as "observed a crack in the foundation and basement appears wet," will raise a red flag to the lender that you should perform a structural inspection. If the bank reads "home accessible only with a 4-wheel drive vehicle," you can be sure they'll want to know more about ongoing road maintenance.

Before the Loan is Approved

The home's title must be cloud-free, meaning there are no problems associated with it such as outstanding liens that can't be paid at closing, right-of-way issues, pending lawsuits, etc.
Your credit profile will be checked again before closing to make sure it hasn't changed in a negative way.

The loan commitment letter is issued only when the lender is sure it will lend, so the commitment date on your contract to purchase should normally be closer to closing than to the date you make the offer. The home seller can demand to see that letter as soon as the date has passed, so question anyone who tries to insert an early commitment date in your contract.

Q: How long does the mortgage process take from start to finish?
A: Usually a mortgage is processed anywhere from 1 week to 1 month, depending on the clients situation. Our trained staff can help walk you through this process and give you a more accurate estimation based on your needs.

Q: How much will my mortgage payments be?
A: You can use our online calculator to determine approximately the amount your payments will be.

Q: What kind of documentation will I need when applying for a home loan?
A: Some of the documentation you may be asked to provide are: Income documents(W2 forms, paystubs from past month, self employment documentation, Pension/Social Security letters) Asset listings, and additional financial obligations other than credit accounts.

Q: How do I apply for a mortgage?
A: Application is made easy with Mortgage & Investment Consultants! Simply completed a confidential application or call Lori at 952.994.1391.