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LESSON 16: PREQUALIFICATION AND PREAPPROVAL
"We need to find the property first, then get a loan."
Your best bet is to get preapproved first so you'll know your housing
budget.
All right. You know you've got better credit than Alan Greenspan.
You've picked out a mortgage lender. You know what's going to be
asked of you and you're ready to get a mortgage. But what if you
haven't found a house yet? Refinancing customers can skip this part,
but loan shoppers who are getting mortgages to buy homes may want
to consider getting prequalified
or preapproved
before starting their hunt. Doing so makes it more likely you'll
win the bidding for that house of your dreams.
What exactly is involved?
Prequalification
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The
mortgage lender will ask you for details about your credit,
earnings, savings and debts in order to come up with an estimate
of how much mortgage and house you can afford. The review should
take no more than a few hours and may take only minutes. |
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The estimate is based
on documentation and information a borrower provides, not what's
been verified. |
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Prequalification is
usually free. |
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