pre-approval Tag

There are several stages to every mortgage loan process, and the early ones are often some of the most important. What you do early in the process can set the table for the rest of it, and as your go-to mortgage company, we at City Creek Mortgage are here to make sure you don’t slip up.

In particular, there are three important elements to remember: Pre-qualification, pre-approval and finally, the loan commitment itself. Let’s look at each, and how they differ.

Pre-Qualification

Pre-qualification is the most informal and simple of the early mortgage processes, and is typically one of the first steps you’ll take. You’ll give basic finances to a lender – debts, income and basic assets. Pre-qualification generally doesn’t include elements like a credit report or investigations into your purchasing ability.

Pre-qualification is never a concrete thing, but rather a broad idea of what kinds of situations you might qualify for. It’s a great time to ask any questions about goals or needs you have with your mortgage, and to get some professional advice on your financial situation as it relates to a mortgage.

Pre-Approval

Pre-approval is similar to pre-qualification and is often confuse with it, but the two are not the same and the differences are important. Pre-approval is a more detailed and official process. It includes credit and background checks that pre-qualification does not, and when it’s finished, pre-approval will result in a conditional commitment in writing for an exact loan amount. With this number, you can begin shopping around for financing within that range.

Loan Commitment

When you’ve found a lender in your price range and are ready to finalize the real thing, it’s time for a loan commitment. The lender will have already taken the steps to confirm you as an approved borrower, and to confirm your home. Many will run one extra final check to ensure there have been no big changes to your income or credit since pre-approval, and then you’ll be all set.

Want to learn more about the mortgage process, or any part of our services? Speak to the brokers at City Creek Mortgage today.

A good mortgage company helps clients with all the steps of a detailed process, and at City Creek Mortgage, we’re here to do that for you. Our brokers will take you through every bit of the process, offering advice along the way.

For many people, one of the most important of these processes is the mortgage pre-approval process. What is this, and how can going through it benefit you? Let’s take a look.

Pre-Approval Basics

Pre-approval involves a thorough investigation of your financial profile by a lender – this will include a comprehensive credit check, plus a detailed look at your income and related expenses. The purpose of this check is for the lender to gain confidence that you’ll be able to meet all the financial requirements of a given mortgage rate.

It’s important to note that pre-approval is not the same thing as pre-qualification. Pre-qualification is a much less formal procedure, mostly meant to get a very general introduction to the lender and loan options. Pre-approval involves much more detail and commitment, and it’s rare for someone to be pre-approved but then later denied for a final application.

Pre-Approval Preparation

Before a pre-approval check, your goal should be to get all your finances fully in order to the best of your ability. You can use online tools to check your credit score (there are tools that allow you to do this for free, and without raising the score by checking it). A lender needs a thorough understanding of your finances, so you should have one too.

Documents

You’re going to need a few documents to present to the lender before you can become pre-approved:

  • Personal information: At least one form of identification, plus Social Security information for the lender to run a credit check.
  • Income information: Things like pay stubs, tax returns and W-2 forms for the past two years will be required. If you have any additional sources of income, these will need to be documented as well.
  • Assets: There are some financial assets that don’t count as claimed income, such as certain investments, savings or personal gifts from family or friends. However, you’ll still need to present these holdings for pre-approval.

Want to learn more about pre-approval, or any of our other mortgage services? Speak to the brokers at City Creek Mortgage today.