Although you can look at online listings and often tour homes before you start the mortgage process, almost all sellers and listing agents will require proof of financing in the form of a prequalification letter if you plan to submit an offer for purchase. We would recommend submitting an application and getting your prequalification ahead of time so that you have a good idea of what you can afford and what price range you’re most comfortable with.

Often times, these terms will be used interchangeably as a way of stating that you have spoken with a mortgage loan officer who confirmed that you are eligible for a mortgage. The key difference between being prequalified and being preapproved is that a loan which has been preapproved has been reviewed and verified by a mortgage underwriter, whereas a loan which has been prequalified has not. A Loan Officer can issue a prequalification based on stated information, but a preapproval must be documented and and checked. Think of it like measuring twice and cutting once: your prequalification is the first measurement, your preapproval is the second measurement for extra detail, and the final cut is when you sign the dotted line at closing.

Buying a home is one of the biggest decisions you will make in your lifetime. Our goal is to make the process as smooth and hassle-free as we can, and understanding the process will give you a head start. Here are the steps we’ll walk you through: Application & Qualification First, we need to know more about you! You can submit an application online or over the phone, and you’ll share information about your credit, income, and assets, along with your preferred contact information. Once we have a full application and an idea of what your goals are with your purchase, we can determine a budget for you to shop with. We’ll provide a prequalification letter to you and your real estate agent showing the high end of your purchase price budget. Shopping for a Home Once you have your budget, the next step is finding the right place. You and your real estate agent will shop for properties within you price range until you find the house you want to make a home. At this point, your agent will help you negotiate your offer for the purchase. Under Contract & Underwriting Congratulations━you’re under contract! When you have a bound agreement for a purchase, we’ll begin gathering documentation to verify the information you gave us at your application. This is also when we’ll order an appraisal on the property so you know that you’re spending the right amount of money on your new house. Our underwriters will review the file we prepare and give a final approval on the mortgage. Closing You did it! Your loan is fully approved, your closing date is scheduled, and your funds are ready to wire. You and your real estate agent will coordinate a date and time to visit a title office to complete the necessary paperwork for taking ownership of the home. The title office will then assist with the transfer of monies, share copies of your purchasing documents, and hand over the keys to your new home.

A rate/term refinance is a means to adjust either the rate or the term of an existing mortgage on a property you own. The new loan you establish will pay off the balance on your existing mortgage to give you the benefits of a lower interest rate and monthly payment or a shorter life term. For example: John bought his first home two years ago with an interest rate of 6.5% and a term of 30 years. He recently got a raise that allows him to afford a higher monthly payment, and he wants to pay off his house as quickly as possible. He chooses to refinance and obtain a new mortgage with an interest rate of 6.25% and a term of 15 years to expedite the payoff. Mary, on the other hand, bought her home around the same time. Her term was also 30 years, but due to her having little down payment funds at the time, her interest rate is 7%. Now that she has built up more equity in her home, she chooses to refinance and obtain another 30-year term mortgage with a rate of 6.5%, which decreases her monthly payments and gives her more money to put into investments.

A cash-out refinance is a means to access the equity━your invested value━in a property that you own. You obtain a mortgage based on the current sales value of your home which pays off your existing mortgage loan and pays you what’s left to be used at your leisure. For example: Bob and Sue own a house worth $500,000. They currently owe $250,000. They’re able to obtain a cash-out refinance for a new loan of $400,000, which pays off their current loan and gives them $150,000 to use for renovations on the home. Jane owns a home worth $300,000 and owes $100,000 on her current mortgage. However, she has several student loans, credit cards, and a car loan that she would like to pay off. She’s able to complete a cash-out refinance for a new mortgage of $175,000, which helps her pay off and consolidate her debts into a single monthly payment.

To answer this, you’ll need to consider multiple factors. First: Do you plan to stay in your home for at least the next two years? If not, then a refinance may not be the best idea for you. The closing costs associated with a refinance won’t always break even with your savings until two or three years later. You may be better off waiting until it’s time to sell your home and working with your lender to get the best deal possible on your new home. If you plan to stay in your home for three years, five years, or maybe longer, then the next question to ask yourself is this: What do you want to achieve with a refinance? Are you pulling out equity to renovate or consolidate debt? Are you trying to reduce the term on your current loan or the minimum amount of your monthly payments? A Loan Officer can work with you to determine whether a refinance can help you complete these goals or if you should wait for a more advantageous time in the market. It can never hurt to discuss your options before jumping in.