Monday, March 17, 2014

PRE-QUALIFIED VS. PRE-APPROVED-WHAT'S THE DIFFERENCE?


Without good preparation, many buyers get lulled into the mistaken notion that if a lender pre-qualifies them for a mortgage this means that they have been pre-approved for a home loan. Unfortunately, there's a world of difference between these two terms. If you've ever been confused by the two, we'll bring you up to speed on how these terms differ - and why a misunderstanding can mean disaster for borrowers.

WHAT DOES "PRE-QUALIFIED" REALLY MEAN?
Getting pre-qualified is the initial step in the mortgage process, and it's generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone or on the internet, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

The initial pre-qualification step allows you to discuss any goals or needs you may have regarding your mortgage with your lender. At this point, a lender can explain your various mortgage options and recommend the type that might be best suited to your situation.

Because it's a quick procedure, and based only on the information you provide to the lender, your pre-qualified amount is not a sure thing; it's just the amount for which you might expect to be approved. For this reason, a pre-qualified buyer doesn't carry the same weight as a pre-approved buyer who has been more thoroughly investigated.

WHAT DOES "PRE-APPROVED" REALLY MEAN?
Getting pre-approved is the next step, and it tends to be much more involved. You'll complete an official mortgage application (and usually pay an application fee), and then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating. (Typically at this stage, you will not have found a house yet, so any reference to "property" on the application will be left blank). From this, the lender can tell you the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock-in a specific rate. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Obviously, this puts you at an advantage when dealing with a potential seller, as he or she will know you're one step closer to obtaining an actual mortgage.


The other advantage of completing both of these steps - pre-qualification and pre-approval - BEFORE you start to look for a home is that you'll know in advance how much you can afford. This way, you don't waste time with guessing or looking at properties that are beyond your means. Getting pre-approved for a mortgage also enables you to move quickly when you find the perfect place. When you make an offer, it won't be contingent on obtaining financing, which can save you valuable time. In a competitive market, this lets the seller know that your offer is serious - and could prevent you from losing out to another potential buyer who already has financing arranged.

Once you have found the right house for you, you'll fill in the appropriate details and your pre-approval will become a complete application.

GET COMMITTED

The final step in the process is what's called a "loan commitment", which is only issued by a bank when it has approved you, the borrower, and the house in question. This means the home should be appraised at or above the sales price. The bank may also require more information if the appraiser brings up anything he or she feels should be investigated (i.e. structural problems, accessibility issues, outstanding liens or litigation in progress). Your income and credit profile will be checked once again to ensure nothing has changed since the initial approval.

A loan commitment letter is issued only when the bank is certain it will lend, so the commitment date on your purchase contract should be closer to closing than to the date of your offer.


Pre-approved and pre-qualified are not the same thing, so don't assume that the bank will provide your loan until you have the former. The mistake could cost you your new home!

Ralph Waldo Emerson, American essayist and poet, once said that the future belongs to those who prepare for it. This is sage advice for home buyers who need to lay the necessary groundwork to buy the home of their dreams. by Brian O'Connell

Saturday, March 30, 2013

Shadow Inventory Down 28 Percent from 2010 Peak

CoreLogic, a leading residential property information, analytics and services provider, reported recently that the overall shadow inventory is down 28 percent from its peak in January 2010, when it reached 3 million homes  Read More >


  http://rismedia.com/2013-03-30/shadow-inventory-down-28-percent-from-2010-peak/



Thursday, March 28, 2013

From Gloom to Bloom: Expecting the Healthiest Spring Season Since 2007


Freddie Mac recently released its U.S. Economic and Housing Market Outlook through March showing that as we head into the spring home buying season, continued low mortgage rates, increasing house prices, and gradually improving consumer confidence will help support increased home sales. A short preview video and the complete March 2013 U.S. Economic and Housing Market Outlook are available here.
Outlook Highlights
•Compared to 2012, expect home sales to be up 8 to 10 percent for 2013. ...

Read More > FULL ARTICLE LINK
--
Frank Gleason
Keller Williams, Metro North
(205) 572-2557
VISIT : franksoldit.com
franksoldit@gmail.com
Real Estate Redefined

Tuesday, March 12, 2013

Real Estate is Back!

Here are some highlights
  • 84% Think Real Estate Values Will Increase
  • Hot and Rebounding Real Estate Markets
  • Cracks in the Canadian Real Estate Market

Saturday, March 9, 2013

Accuracy of Zillow, Trulia listing data under fire again

Accuracy of Zillow, Trulia listing data under fire again

Touting IDX data, ZipRealty invites consumers to use new 'Listing Check' tool

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=92285236" target="_blank">Home search</a> image via Shutterstock.Home search image via Shutterstock.

Editor's note: This story has been updated with comments from Zillow and Trulia, and additional details on ZipRealty's study of listings accuracy.

Following in the footsteps of Redfin, ZipRealty Inc. is emphasizing the timeliness and accuracy of the Internet Data Exchange (IDX) listing data it serves up on its website in comparison to the sometimes dated and incomplete information on third-party listing portals like Zillow and Trulia. FULL ARTICLE LINK








Thursday, February 28, 2013

Home-Prices-Closed-out-a-Strong-2012


Home Prices Closed Out a Strong 2012

Data through December 2012, released this week by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended the year with strong gains. The national composite posted an increase of 7.3 percent for 2012.
 FULL ARTICLE LINK :

http://rismedia.com/2013-02-27/spcase-shiller-home-prices-closed-out-a-strong-2012/

Saturday, February 23, 2013

Housing Continues to Gain Ground By Pete Bakel

Housing Continues to Gain Ground By Pete Bakel
Although the economy seems to be transitioning to a slightly stronger growth path, unresolved fiscal policy decisions pose significant headwinds in early 2013, according to Fannie Mae's Economic & Strategic Research Group.  FULL ARTICLE LINK