start building a loan package.
Some lenders will prey on the fact that you don’t know the difference between these two types of letters. A professional lender will not assume that a pre-qualification letter is good enough to begin the loan process. I work with my customers to achieve pre- approval status before discussing anything further. As you might know, after the housing crash we had some years ago starting around 2008, banks are now more stringent about loans. As such, a pre-qualification letter is simply not good enough to get a mortgage from a professional organization in today’s marketplace. Any lender who tells you otherwise is not a lender you want to work with.
You need a rock-solid preapproval letter.
PROCESSING: A SOLID LOAN ESTIMATE
Once you have your sights set on a property and have your pre- approval letter in hand, your next step should be to obtain a solid loan estimate for the property. The loan estimate lists loan terms and settlement charges to be paid if a borrower decides to go forward with working with any particular lender. It is not a pre-approval, nor is it a pre- qualification. It is more of a “This is what we will likely offer you when you start the loan process and are approved for the loan.” The loan estimate used to be called a “good faith estimate.” It’s called a loan estimate today, and it is basically an upfront quote of all the different costs, fees, interest rates, etc., that buyers can expect to pay if they proceed with a loan from that lender. It explains which charges can change before settlement and which charges must remain the same. It usually also contains a chart that compares multiple mortgage loans and settlement costs, making it
25
Powered by FlippingBook