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Mortgage Pre-Approval Process and Forms

October 30th, 2009

mortgage-loan-pre-approval-form.jpgThe mortgage loan pre-approval process refers to the procedure followed by people who want to know the amount of money that they are able to borrow for purchasing a new house. This is the first step taken by people who want to procure a new home through the money lent by a financial institution. Performing this important introductory step can help you to get an idea about the actual extent of your borrowing capabilities with which you can secure a new loan for buying your favorite house. After knowing the amount of money that you could actually be approved for, it becomes much easier to do your house hunting search with realistic expectations.

In order to get a mortgage pre-approval, you will need to provide some information to the institution from which you want to receive the loan. Different financial institutions require various details about your financial standing such as your income, currently extant debts, credit history, and other vital statistics that could affect the process of mortgage pre-approval. The main purpose for collecting this information and going through this procedure is to find out whether or not you will actually be able to repay the mortgage loan over time, and if so, how much of a debt load you would be able to handle.

There are various websites on the Internet which offer tips on how to get through the mortgage pre-approval process and eventually accomplish your goal of being a successful property owner. With the help of these sites along with assistance from real estate agents or other experts in this industry, you will be armed with various methods with which you can enhance your chances of moving into your beloved dream home. If you are able to obtain the pre-approval before attempting to procure the mortgage loan itself, you will usually be at an advantage during the negotiation phase of the loan procurement because most sellers will prefer to deal with people who have already been vetted for basic financial sustainability.

Mortgage Pre Approval Forms

A mortgage pre approval form is a document which is filled out by people who want to get a clear idea about their finances before buying a new house. By filling out these forms, you will become familiar with how much money you are able to borrow for purchasing new property.

You can obtain these forms from any bank or mortgage company and use them as a starting point for success in the mortgage pre-approval process. They are held for around 90 days by most of the financial institutions after submission. It is always beneficial to complete this form with accurate information because this may be used to determine the interest rate and terms of your loan contract.

After completing the form, if the rate of mortgage goes up before signing the purchase agreement for buying a new home, you will get the mortgage at the same rate which existed at the time of submitting the form. However, if the mortgage rate decreases before signing the purchase agreement, you will be able to begin your loan terms at the lower rate.

The wonderful technologies of the Internet can also be of assistance here; for example, you can download these forms from the websites of various financial institutions so that you can look through them and fill them out at your leisure. There is also something called a “mortgage pre-approval calculator” that can help you to do the necessary math and figure out exactly how much money you will need to borrow to amortize your loan and how much interest you will end up paying. Although you may not want to look at that last part (the interest, that is — in some cases, you can end up paying for your house twice if you take long enough to do so or get an unfavorable interest rate), at least you will have the comfort of knowing what to expect before you try to negotiate for a mortgage loan.

Related article: What to Bring When Applying for a Mortgage

This article on the mortgage pre-approval process was sent to us by “simplyjo” from the DigitalPoint forums and has been significantly modified to correct for annoying grammatical issues, poor writing style, redundant verbiage, and over-optimization of keywords.

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