Thursday, February 28, 2013

There's no such thing as getting "pre-approved" for a mortgage

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Applying for a mortgage is a long process. Even before filling out the paperwork, the applicant must already have the correct “background” for the loan: a consistently high credit score, a satisfactory income at a long-term job, and a continuing ability to pay amortization– regardless of circumstance– for the duration of the mortgage. Some lenders require several background checks and interviews before approving an application. This long and tedious process sometimes causes applicants to jump at the first chance to cut the line.

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Buyers are sometimes approached by agents or banks claiming that they have been “pre-approved” for a mortgage. Without giving too much information as to how that happened, they imply that part of the initial paperwork and hassle will be bypassed; the scenario usually ends with the buyer submitting an application on the spot.

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Although a preliminary approval does exist, it is merely a means for the seller to see that the buyer has the means to pay for the property. It is by no means a guarantee that the buyer has “passed” the background check or is approved for a mortgage. If anything, being pre-approved for a mortgage simply means that buyers have been assigned to a mortgage rep or agent. In fact, it does not move them any further along the process. They are subject to all the same steps, and along the same timeline, as if they had applied for the mortgage themselves.

Applying for a mortgage has its own house of booby traps. Let Network Capital Funding Corporation help you in processing your loan. Read more about the company on this website.

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