Speaking in general, with current federal financial guidelines, borrowers are advised to apply a loan application only when they are all set to buy a home. In case the borrower is not ready to make an offer on the house, he/she need to be pre-qualified. This is not the same as making a prior approval for buyers. The two terms are not interchangeable, so it is important to thoroughly understand the differences between them while undergoing the process of mortgage loan in Mumbai.

Pre-Qualification

Pre-qualification can be termed as a phase of determining in advance how much a potential borrower might be eligible to borrow. This may be done by any mortgage loan originator, but it does not guarantee approval. Pre-qualification of a buyer is not undergoing into any agreement with the mortgage broker or lender, a process where Riddhi Siddhi Multi Services can help you understand why the distinction is important. It is a free “test run” of the loan application process that usually takes only a few hours. The mortgage broker or lender is only saying that it looks favorable that the borrower will be approved. Often there’s more background research, documentation, and information that the mortgage broker or lender must obtain, but won’t until the borrower has actually applied for the loan.

This process consists of getting information about income and debts of prospective borrowers. A credit report can be asked for by originator of mortgage loan in Mumbai. A mortgage loan originator’s pre-qualification of a prospective borrower may be as simple as making sure that the borrower has a steady job and no glaring credit report problems, like a recent bankruptcy.

Some mortgage brokers or financers offer a pre-loan qualification certificate form, which is not binding. Taking in assumption that a credit decision is not anticipated as result of this, it does not require trigger disclosures

Pre-Approval

The process in which a lender determines if potential borrowers can be financed through the lender what amount of money to be granted is known as Pre-approval. In general, a mortgage broker cannot give a borrower a pre-approval; only the lender can pre-approve of the mortgage loan In Mumbai. For a pre-approval, a borrower goes through most of the same steps in the loan process, such as completing an application and providing documentation of income and assets. A lender with pre approval describes that the prospective borrower’s situation is investigated and stay the same in all provided circumstances, the lender is willing to mortgage loan in Mumbai with a certain amount of money to make the purchase. This is especially helpful when working with buyers because it is a powerful negotiation tool in getting an offer accepted by a seller and, in most cases, is a requirement of contract acceptance.

On the basis of some internal pre-approval procedures, certain pre-approvals are more specific and binding. This is where experience is helpful, and where you should take advantage of the wisdom and experience your employer and other senior mortgage professionals can offer.