Coldwell Banker King Thompson - Home Buyers Guidebook - 2017 | Page 14

FINANCIAL FAQs
Financing Your New Home
Answers to these financial questions will help you get a basic understanding of the financing
process. Of course, your Coldwell Banker King Thompson Realtor ® can assist you in finding all
the information you need to know to make a sound decision on the purchase of a new home.
Q.

A.

What is the difference between
“prequalified” and “preapproved”?
A prequalification consists of a discussion
between a home buyer and a loan officer.
The loan officer collects basic information
regarding the customer’s income, monthly
debts, credit history and assets, and then
uses this information to calculate an estimated
mortgage amount for the home buyer.
The prequalification is not a full mortgage
approval, but estimates what a home buyer
can afford.

A preapproval, on the other hand, is a
comprehensive approach using basic
information as well as electronic credit
reporting. Preapprovals, in most cases, are
true mortgage commitments. The lender
commits to financing your home and indicates
the total mortgage amount available to you.
Q. What types of mortgage programs
are offered?
A. Currently, there are different mortgage
products available, including, but not limited to:
• 15, 20, and 30-year fixed rate loans
• Adjustable rate loans
• New construction financing
• VA and FHA loans
• 5 and 7-year balloon loans

All mortgage products have their own benefits
and disadvantages. Talk to your financial
institution to discuss which product is best
for you.
Q.

A.

How long does it take to process
a mortgage application?
Usually about 45 to 60 days, although it can
take as few as seven days and as long as
90 days for some transactions.
The actual time depends on how quickly the
lender can get an appraisal of the property,
a credit report and verification of employment
and bank accounts.
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