In the exciting journey of homeownership, understanding the distinctions between pre-qualification and pre-approval is crucial. While the terms may sound similar, their implications vary significantly, especially for eager homebuyers. In this blog, we'll examine the key differences and help you decide whether to start with a pre-qualification or jump straight into the pre-approval process.

Mortgage Pre-Qualification: Testing the Waters

What is Mortgage Pre-Qualification?

Before fully committing to the homebuying process, getting pre-qualified acts as a preliminary step. During this phase, you provide an overview of your financial situation, encompassing credit, debt, income, and assets, to your mortgage lender. Some lenders may perform a credit check, but the process is generally informal.

The Purpose of Pre-Qualification

Home loan pre-qualification serves as a valuable tool for prospective buyers to gauge their borrowing power. It offers an estimate of how much you might be able to borrow, assisting you in planning and preparing financially for your homeownership goals. This initial step provides insights into your potential monthly mortgage payments, aiding in the creation of a realistic budget for your home search.

How Mortgage Pre-Qualification Works

Getting pre-qualified is a straightforward process. You share your financial snapshot with the lender, and based on this information, they provide an estimate of your borrowing capacity. While not a guarantee of loan approval, pre-qualification is a cost-free and quick way to initiate your homebuying journey, whether over the phone or online.

Mortgage Pre-Approval: The Real Deal

What is Mortgage Pre-Approval?

Moving beyond the preliminary stage, mortgage pre-approval is a more comprehensive process. It involves submitting documentation, such as pay stubs, W2s, tax returns, and bank statements, for a thorough evaluation by the lender's underwriter. The outcome is a pre-approval letter, indicating the specific mortgage amount you qualify for.

The Significance of Mortgage Pre-Approval

A pre-approval letter holds substantial weight in the eyes of sellers, showcasing your serious intent and financial capability. This advantage can make a difference in competitive real estate markets, positioning you one step closer to securing the home of your dreams.

Required Documentation for Pre-Approval

To kickstart the pre-approval process, gather essential documents like pay stubs, W2s, federal tax returns, and bank statements. Having this information ready not only streamlines the pre-approval process but is also a precursor to the documentation needed for the actual loan application.

Click here to grab your free Documentation Checklist.

Making the Decision: Pre-Qualification or Pre-Approval?

Consider Your Homebuying Readiness

Ask yourself whether you're merely contemplating homeownership or ready to embark on house hunting. If you're in the early stages, pre-qualification provides a useful starting point. However, if you're prepared to make offers on homes, skipping pre-qualification and opting for pre-approval gives you a competitive edge in the market.

Bottom Line

In the intricate world of homebuying, understanding the nuances between pre-qualification and pre-approval is pivotal. While pre-qualification offers a preliminary glimpse into your borrowing potential, a pre-approval letter elevates your standing with sellers, signaling your seriousness and financial readiness. Whether you choose pre-qualification to dip your toes or dive into pre-approval, the key lies in aligning your choice with your current stage of homebuying readiness.

Helpful Resources

• Roadmap to Mortgage Pre-Approval
• Homebuyer Guide
• Get pre-approved
• Apply Now – Full Mortgage Application

 

Getting Started On Your Home Buying Journey

Getting a home loan may feel like an epic journey at times, but with the right guidance it can be easily conquered. Before you begin, reach out to a Greenway Loan Officer to discuss your financial situation so we can work on a plan to get you into the home of your dreams.

Feel free to click below and receive your complimentary Mortgage Pre-Approval Roadmap Brochure. It includes tools to help you monitor your monthly budget as well!

Succeed with a Mortgage Pre-Approval

After speaking with a Greenway Loan Officer, we’ll be able to assess your financials and determine the size of the loan you qualify for. By getting pre-approved, you’ll be able to:

• Narrow down your market because you’ll know how much you can afford

• Signal to sellers that you’re serious about home buying.

• Make strong offers.

• Help you beat out the competition and negotiate with power

• Close smoothly with a fast loan process

Mortgage Loan Documents Needs

To get you pre-approved you will be asked to present documentation that substantiates the information you provide on your application, which may include:

• Pay stubs – last 30 days

• W2s – last 2 years

• Tax Returns (in some cases)

• Employment History

• Bank statements

• Realtor and attorney contact info

• Copy of photo ID

Saving You Time | Greenway's Online Pre-Approval Application

Our online pre-approval application, streamlines the process, eliminates paperwork (saving you time and more trees) and adds greater transparency in a surprisingly simple format, whether you’re a first-time homebuyer, leveling up, refinancing or extracting equity.

Our intuitive interface will guide you through the pre-approval process from beginning to end. The best part...you can apply anywhere on any device at any time with confidence in about 15 minutes or less!

Pre-Approval Application | What To Expect

You’ll first start by creating your personal account and enter basic info such as:

• Type of Loan (purchase/refi)

• Marital Status

• Co-Borrower Information

• Employment History

• Income

• Real Estate Owned

• Assets and Liabilities

• Gifts and Grants

• Declarations

Our application allows you to import your financial data from your bank(s) to verify your income and assets, eliminating the need to supply copies of paper statements.

Having this information upfront allows us to quickly and accurately evaluate your scenario and issue a pre-approval in about half the time in most cases.

The Hunt for Your Dream Home

Now that you have a pre-approval, work with your Real Estate agent to find the ideal home that best suits your budget. Your realtor will guide you through the negotiation process. Once a price is reached that both parties can agree on, a purchasing agreement will be signed.

Your Mortgage Loan Dashboard

Once you’ve completed the application, you’ll be directed to you’re loan dashboard where you can upload any important docs that may be needed. You will also have access to send your loan officer a message.

Transparently – You’ll always receive clear communication from us every step of the way.

Mortgage Question & Answers:

What is a soft inquiry?

A snapshot of your credit score when it’s pulled. It’s also known as a soft credit check which happens when you or someone you authorize checks your credit report. Soft pulls have no impact on your credit score and do not generate an inquiry on your credit report.

What is a hard pull?

A hard pull has an impact on your score and can lower it by up to 3 points. It does create an inquiry on your credit report, but your score is protected for 90 days. This is only required for an official loan application. A hard pull isn’t needed for our pre-approval application.

Why Should I Get Pre-Approved for a Mortgage?

You'll be certain about the price range that's best for you. You'll know how much cash you'll need to close, and you'll know your maximum monthly payment. Understanding your limits will help you negotiate with confidence. Plus, since sellers like a sure thing, you'll have an advantage over buyers who may not have a pre-approval letter.

How Long is a Pre-Approval Valid?

A pre-approval is typically good for the "shelf life" of the documents used. These will include a credit report, pay stubs, bank statements, W2s, tax returns, etc. The usable life of these documents will vary, yet it's usually safe to say that your approval is good for up to 3-4 months. During this time, it pays to file all important financial documents so they're readily available for future updates.

What If I Change My Mind About Mortgage Pre-Approval?

There's no obligation to purchase a home or use a particular loan program once you've been pre-approved. Pre-Approval simply helps to assure you know exactly what's involved, that you are comfortable in a particular price range and that you are truly ready to make your move.

Things you should do before getting a mortgage:

• Save for your down payment
• Track your monthly budget
• Obtain an up-to-date credit score
• Reduce your current debts
• Prepare loan documentation

When you do begin the process of applying for a mortgage, be sure to reply to any requests from your lender quickly. The most common reason for approval delays is missing or incomplete information. The best way to ensure your application is processed quickly is to be prepared and respond to all requests from your loan officer.

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Helpful Mortgage Resources

• First-Time Homebuyer Resources
• Homebuyer Guide
• Mortgage Calculators
• What to Expect During the Mortgage Process
• Online Pre-Approval Application
• Online Apply Now Application 

 

 

In the ever-evolving landscape of personal finance, leveraging your assets to secure a brighter future has become a prevailing theme. If you're still grappling with high-interest debts from last year or envisioning major life changes, your home's equity could be the key to unlocking newfound financial freedom. Let's explore how tapping into your home's equity can jumpstart your journey to regain control and turn your dreams into reality.

#1: High-Interest Debt is SO Last Year!

High-interest debts can weigh heavily on your financial well-being, limiting your options for growth. However, your home's equity presents a unique opportunity to break free from this burden. By strategically utilizing this valuable resource, you can consolidate debts and benefit from more manageable interest rates, paving the way for a more secure financial future. Contact us if you'd like to talk about your options. You may be surprised!

#2 Make Your Home Renovation Dreams Come True!

Your home is not just a place to live; it's an investment. If you've been harboring dreams of transforming your living space, your home's equity can be the catalyst for change. Whether it's a kitchen renovation, a bathroom upgrade, or a complete home makeover, unlocking the equity in your property can bring your home renovation dreams to life.

#3 Finance Your Big Plans

As you set your sights on big plans for the year, consider putting your home's equity to work. By doing so, you ensure that you have the financing you need when you're ready to take the plunge. Whether it's starting a new business, furthering your education, or embarking on a once-in-a-lifetime adventure, your home can serve as a financial springboard for your aspirations.

#4 Optimize Your Home Loan for Financial Changes

Making financial changes this year? Look no further than your home loan. Opportunities for saving, investing, or fulfilling long-held dreams may be hiding within the structure of your existing mortgage. We're here to guide you through the possibilities, helping you make the most of your home's equity and position yourself for a more prosperous future.

Bottom Line:

In the realm of personal finance, your home's equity stands as a powerful tool waiting to be used! Don't let it remain untapped; reach out to explore the possibilities and discover how your home can be the key to achieving your financial goals. Contact Greenway Mortgage today, and let's start the conversation that could reshape your financial future. It's never too early to take the first step toward a brighter 2024!

 

 

As we usher in the promise of a new year, many of us contemplate resolutions that bring positive change into our lives. If buying a new home is on your list of goals for 2024, we've got you covered. In this guide, we'll walk you through five crucial steps to ensure you're in the best financial shape to embark on the exciting journey of homeownership.

Step 1: Start Saving for a Down Payment (Boost Your Savings)

The hurdle of saving for a down payment is a common concern for prospective homebuyers However, here's the good news: 3% down payment options are now common! The key is to kickstart your savings early. Check out our website or give us a call at 888-616-9885 to explore tailored loan options that suit your financial goals.

Need some quick saving tips? We've compiled a list of 10 easy ways to help you get started.

1. Save your raises, bonuses, and tax returns
2. Transfer a fixed amount into a special savings account every month or even every paycheck
3. Consider a one-year vacation hiatus
4. Negotiate a raise
5. Trim unnecessary expenses
6. Liquidate investments
7. Explore part-time work opportunities
8. Seek financial assistance from relatives
9. Get a financial gift
10. Inquire about down payment assistance programs

Remember, the earlier you start saving, the better.

2. Check and Improve Your Credit Rating

Your credit score is the foundation of your mortgage application. Strengthening it can unlock better mortgage options. Learn the ropes of good credit practices, from tracking your spending to using credit cards wisely. No matter what your current score is, there's always room for improvement. Foster good credit habits by:

• Recording your spending
• Staying current on debt payments
• Avoiding exceeding your credit limit
• Using credit cards judiciously
• Postponing significant purchases (e.g., a new car or furniture)

3. Tame Your Debt

Manage your debts strategically to positively impact both your credit score and debt-to-income ratio. Prioritize paying down debts to enhance your financial profile and afford more home. Bottom line, the less debt you have, the more home you will be able to afford.

4. Find Your Dream Home:

With your finances in order, it's time to identify your dream home's key features. Consider factors such as:

• Number of bedrooms
• Number of bathrooms
• Square footage
• Location
• Neighborhood
• Schools
• Local traffic/public transportation

5. Get Pre-Approved for a Loan:

Before embarking on your home search, secure a pre-approval. This involves a comprehensive assessment of:

• Credit score
• Income and finances
• Tax returns
• Employment status
• Current debts

A pre-approval not only clarifies your budget but also signals to sellers that you're a serious and prepared buyer.

Bottom Line:

Ready to turn your homeownership dreams into reality? Click below to start the pre-approval process or call our expert loan officers at 888-616-9885 for personalized assistance.

With these steps, you're well on your way to making your dream home a reality in 2024. Happy house hunting!

 

Before you chase the lowest interest rate for your next mortgage, consider a few tips from Grenway Mortgage.

Be wary of comparing only APRS

The annual percentage rate (APR) expresses the total cost of interest AND fees as an interest rate over the full term of a loan. The problem is, most people pay fees up front and have their loan for far less than the full terms. This makes the APR inaccurate.

Insider Tip:

1. Compare loan costs and monthly payments separately for a better understanding of exactly what you'll pay and when.
2. If you plan to sell or refinance in a few years, any savings from a lower rate may not make up for high upfront fees.

Be wary of Advertised Interest Rates:

Advertisements often reflect the lowest rate available only for a very limited time and only to those with high credit scores and large down payments. Many factors, including your property type, down payment, credit, time to close and more, will impact your actual rate.

Insider Tip:

1. A Greenway Mortgage Loan Officer will ask the right questions to help you access the optimal rate and cost combination for your specific scenario.

The Fed Does Not Set Mortgage Rates

The media dutifully reports policy rate adjustments by the Federal Reserve Board, but mortgage rates do not change in tandem. They will more often more in advance of Fed Announcements.

Insider Tip:

1. Mortgage professionals follow the mortgage market every day and are a better source than the media for anticipated and up-to-the-minute rate information.

Bottom Line:

A no-obligation chat with a Greenway Mortgage Loan Officer can save you money! When you're ready to take the next step, we are happy to consult with you to devise a plan for you and your transaction. Give us a call 888-616-9885.