Before you begin to shop for a new home, you should set up a time to meet with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.

To get pre-qualified for a loan, I will talk with you about your debt, income, and assets. We’ll discuss your credit profile but not necessarily pull credit. We will determine how much down payment is possible and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow. This is going to be based on the MAXIMUM debt to income the specific loan program allows. (Usually 42%) For more information on Debt to income please see www.portlandhomeloanexperts.com/dti .

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount. As a matter of fact, most home sellers will not even consider your offer until you are pre-approved.

To get pre-approved, you will complete a mortgage application with your lender. This can be completed in person, online or over the phone. After you application has been reviewed, your Mortgage Banker/Broker will pull your credit and run Desktop Underwriter to determine your eligibility. Desktop underwriter is an electronic underwriter that weights the information on your loan application against the guidelines for the specified loan program. As long as your documentation matches what is disclosed on the application, you should be approved.

A pre-approval letter is not binding because it has not been reviewed by an underwriter. Once we have Underwritten approval the lender will issue their commitment to lend.

Getting pre-approved may seem like a scary process, but in reality it takes about 20 minutes online and 24 hours for us to review the loan application. It is our job to get you pre-approved. So in the event you are not qualified yet, we will create a plan to get you on the right track. Everyone deserves to own their home!

To get pre-approved today, go to www.portlandhomeloanexpert.com/loanapplication