Understanding the Difference Between Prequalification and Preapproval

Understanding Prequalification and Preapproval for Mortgages

People can confuse prequalification vs. preapproval for mortgages when they are applying for a loan. However, there are noted differences. For example, to become prequalified, you must give a loan officer income and debt information to determine the loan amount you can manage. Preapproval, on the other hand, requires more information gathering and checking on the part of the lender. In other words, the lender must compile your credit report data as well as determine your debt to income ratio. Preapproval makes it easier for you to shop for real estate as you do not waste your time looking at homes you couldn’t possibly afford. Not only is your credit history important when you are becoming preapproved so is the amount … Read more

Buying a Home with Private Mortgage Insurance and Pay PMI Off Early

12 Things You Should Know Before Buying A House

If you are new to home buying, you will soon find out that most lending institutions require that loan applicants put 20% down when applying for a mortgage, or you will need private mortgage insurance. Of course, there are exceptions to this rule, of course, as some financial institutions will accept applications even in this turbulent home buying market with 10% down. Go online first and contact a couple of brokers or several lenders through a service like LendingTree.com which will find you four mortgage loan offers. Buying a Home With Private Mortgage Insurance (PMI) If you do not have the 20% down payment, then you will be required in almost every instance to buy private mortgage insurance which is also … Read more

How Debt Can Ruin Your Retirement

This is a guest post by Mike Egan who is the author of Your Stronger Financial Future.

Your Stronger Financial Future by Mike EganA recent article in the New York Times focuses on seniors who are considering mortgages on new homes when they retire. The article is a good summary of what seniors (or anyone considering a mortgage application) should expect and the specific items to have handy, such as proof of income and a good credit score.

What the article doesn’t address is the question of whether a mortgage is a good idea, either for a senior (65 and older) or anyone else.  Think about this – no matter what the term of the home loan, or mortgage, you’ll be paying interest to the lender, plus repaying the principal (the $$ you borrowed) for some period of time.  Home mortgages and student loans are the two main examples of what I call “good debt” – which are loans that result in you owning something of value at the end.  So, given that a mortgage generally results in you owning the house or condo when you’ve paid back the loan, let’s examine the math involved in a home mortgage.

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Understanding the Types of Mortgages Available to Save You Money

Understanding The Types Of Mortgages Available To Save You Money

You need to make sure you understand the types of mortgages you have and the various types of available notes. The thought of losing your home can because a good deal of anxiety. If you are struggling with your bills or you or someone in your family has been added to the ranks of the unemployed, then you are entitled to feel a bit concerned. However, do not let these kinds of thoughts override common sense and practicality. Understanding the types of mortgages available before you sign on the dotted line can help you avoid costly mistakes. What Is A Fixed Rate Mortgage A fixed-rate mortgage, for example, is a note where the interest rate or APR is a fixed … Read more