SEVERE WX: Flood Warning View Alerts
CLOSINGS: View Closings

My Money Monday, March 12 - What is mortgage pre-approval?

Here is what you need to know.

Posted: Jun. 20, 2018 2:09 PM

What is a Mortgage Preapproval?
Link: https://www.firstalliancecu.com/blog/what-does-preapproved-mean-and-is-it-important

Q: The thought of buying a home brings up a lot of questions. What are the most common questions you help people answer?

A: You’re right. We do receive a lot of questions. The most common are preapproval questions, like how much can I afford? What are the costs and fees for the mortgage? To answer most of these questions we do what is called a pre-approval, where we show people a complete breakdown of the total cost of the mortgage and what their monthly payment would be.

Q: Tell us a little bit about how the preapproval process works.

A: A preapproval is when a lender assesses your total financial situation. They review your credit score, your income, your assets, and your expenses. From there, they can calculate an approximate loan amount. For example, a borrower may think that they can afford a $2,000 a month payment, but after going through the pre-approval process, they realize that a $1,500 is much more affordable.

Q: Do you have to have a preapproval in order to buy a home?

A: Not necessarily, however most real estate agents won’t work with you until you have been pre-approved by a mortgage lender first. Plus, the sellers of the home will also take your offer more seriously when you have been preapproved for a mortgage. Really a preapproval is assurance that you can get financing.

Article Comments

Mason City
Clear
28° wxIcon
Hi: 40° Lo: 26°
Feels Like: 23°
Albert Lea
Clear
28° wxIcon
Hi: 38° Lo: 26°
Feels Like: 28°
Austin
Clear
30° wxIcon
Hi: 40° Lo: 27°
Feels Like: 30°
Charles City
Clear
30° wxIcon
Hi: 41° Lo: 26°
Feels Like: 23°
Rochester
Clear
27° wxIcon
Hi: 38° Lo: 24°
Feels Like: 19°
Tracking warmer weather by the end of the week!
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Riverfront property: What's Next?

Image

Flood risk in Olmsted County

Image

A look back on the historic career of John Marshall's Matthew Hurt

Image

Flooding concerns in Olmsted County

Image

Lawsuit filed: Nonprofit and breeding operation

Image

Hands free driving in Minnesota

Image

Next Week's Work Week

Image

Community Child Care Forum

Image

Working to fix pot holes

Image

Bridge Coming to Trail

Community Events