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Mortgage Pre-Qualification Question

In the coming months, I plan to sell my home and move to another state. My home will soon be put on the market, and I'll then be looking for a new home and start mortgage-shopping.

It's been years since I shopped for a mortgage and times have changed (Internet, etc). So, I feel that I'm new to this.

What's the best route to get pre-qualified for a mortgage? Are websites like QuickenLoans.com and LendingTree the best way to go? Are there others?

Also, how soon ahead of the home purchase is it advisable to get pre-qualified? Finally - What exactly does pre-qualification mean --- Is it merely a loan amount that's pre-approved or is it locking into other terms (ie - rate, payoff period, etc.)?

Thanks!

Reply to
BRH
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A pre-qualification is a suggested maximum that you could potentially borrow. Since there is no loan being considered at that time, you do not actually go to underwriting, and there is no way to know for sure if you actually will qualify for that loan or any loan. All it shows is that someone pulled your credit, asked your income, and suggested a price range to look at. It really only serves to weed out those with really bad credit and keeps people from looking at houses that are far out of their price range.

If you go this route, the best time is far enough in advance so that if a problem is found, you have time to fix that problem. A bank or a local lender is a good place to go. There is nothing binding, so you can pre-qualify at one place, then apply for a loan somewhere else.

-john-

Reply to
John A. Weeks III

BRH

It is important to keep your terms consistent. John does an excellent job with pre-qualification. Pre-approval is more involved and means you are pre-approved for a specified amount, and will be approved for your mortgage, assuming the house meets the requirements. The rates and fees of the mortgage will be those at the time the mortgage is applied for or approved, depending if you lock your rate at time of application.

Reply to
David Smith

In addition to web sites like those, have a look at this site:

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It is not a place to get a mortgage, but is an excellent place to get information about how mortgages work and pitfalls to look out for while you shop around.

Reply to
Don

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