Coldwell Banker Residential Brokerage Home Buyers Guidebook - 2017 - Page 16

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 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. Q. A. What types of mortgage programs are offered? Currently, there are a number of 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 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. 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. Continued on next page... 16 ©2017 Coldwell Banker Residential Real Estate LLC. All Rights Reserved. Coldwell Banker Residential Brokerage fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Operated by a subsidiary of NRT LLC. Coldwell Banker and the Coldwell Banker Logo are registered service marks owned by Coldwell Banker Real Estate LLC. Real estate agents affiliated with Coldwell Banker Residential Brokerage are independent contractor sales associates and are not employees of Coldwell Banker Residential Brokerage.