Mortgage Pre-qualification and Pre-approval
PRE-QUALIFICATION - This is an easy first step to show sellers you’re getting serious about buying. In order to get a mortgage pre-qualification letter, a loan officer will make a general assessment of your financial situation. They’ll be able to gauge whether or not you can get a loan and how much money you can get. PRE-APPROVAL - Once you’ve gotten a better idea of your financial picture, you need to get pre-approved. It’s important to time your pre-approval with when you’re ready to buy because a pre-approval letter expires in 60 to 90 days. Pre-approval is a conditional promise from a bank or lender that they are willing to lend to you, and for what amount.
PMI Mortgage Insurance: Who Are The 7 U.S. Mortgage Insurers?
The 7 US mortgage insurers that provide private mortgage insurance (PMI) to lenders. Private mortgage insurance (PMI) insures the lender, not you when you buy a home with a down payment of less than 20 percent. It protects their interest in the event you default on your loan and is a requirement by lenders on loans provided to borrowers, with less than 20 percent as a down payment, toward the purchase of a home. So, essentially you are paying an insurer to protect the banks interest on your mortgage if your down payment is less than 20 percent because they are the ones taking the risk on your viability as a borrower.