Getting pre-qualified is the first step in the home buying process. It involves supplying a lender with basic information regarding your debt, income and assets. From this information, lenders can get an idea of the mortgage amount for which you qualify, and it can usually be done at no cost.

Getting pre-approved is the next step. The process requires that you complete a mortgage application (and usually pay an application fee) and supply a lender with all the necessary documentation to check your financial background and credit rating. You will then be told the exact mortgage amount for which you are approved.

The obvious advantage of completing both of these steps before you look for a home, is knowing in advance, how much you can afford to spend. You won't waste time looking at properties beyond your means. The initial pre-qualification stage allows you to discuss with your lender any goals or needs you may have regarding your mortgage. He or she can then explain your mortgage options and recommend the type that might be best suited to your particular requirements.

Getting pre-approved for a mortgage also enables you to move quickly when you find the home of your dreams and make an offer that is not contingent upon obtaining financing. It also lets a seller know your offer is serious and could prevent you from losing out to another purchaser who already has financing arranged.

Product Highlights

Conventional Loans - conventional loan is any type of mortgage that is not secured by a government sponsored entity such as the Federal Housing Administration or the Veterans Administration.

FHA Loans - Perfect for first time home buyers, lower credit or anyone. A great point about FHA loans and the FHA Express is that you can buy a house with a tiny down payment - only 3.5%. That's one of the lowest down payments for any mortgage loan offered in today's economy. There are no maximum income levels with FHA programs. There are county-specific maximum home loan amounts however; borrowers should check with their mortgage banker to learn the specific requirements for the county in which they are financing the house. FHA Loans are secured by Federal Housing Administration

Streamlined-K Mortgage Loans - Like the 203K loan program, FHA has another program that provides funds to a borrower to fix-up a home by rolling the funds into one loan. The dollar limits for repair work are lower on a Streamlined-K loan, but it requires less paperwork and is easier to obtain than a 203K.

VA Loans -  VA loans are a benefit earned by veterans and current service members of the military. VA loans have a no-down payment requirement for most loans and no PMI. This allows many more home buyers - especially in difficult housing and financial markets - to afford a home - VA Loans are secured by Veterans Administration.

Jumbo Loans - also called non-conforming loans, are mortgages with loan amounts greater than the conforming loan limit with slightly higher interest rates. The conforming loan limit is set every January. The current conforming loan limit is $417,000

Fixed-rate mortgages - This is the best type loan. You can choose from 10-year, 15-year, 20-year-, 30-year, 40-year and even 50-year fixed-rate mortgages, all of which are completely amortized.

Adjustable-rate mortgages (ARMs) - come in many flavors, colors and sizes. The interest rate fluctuates. It can move up or down monthly, semi-annually, annually or remain fixed for a period of time before it adjusts.

Balloons- a fixed interest rate for a set period of years. Unlike traditional fixed rate home loans, the interest rates on balloon loans are nearly as low as those found on adjustable rate mortgages. The problem with balloon loans, however, is the term. Balance must be paid in full at end of term.

Interest Only Loans - Calling a mortgage loan type an "interest-only mortgage" is a bit misleading because these loans are not really interest only, meaning the borrower pays only interest on the loan. Interest-only loans contain an option to make an interest-only payment. The option is available only for a certain period of time. However, some junior mortgages are indeed interest only and require a balloon payment, consisting of the original loan balance at maturity.

Bridge / Swing Loans - These types of mortgage loans are used when a seller has put a home on the market -- but it has not yet sold -- and the seller wants to borrow equity to buy another home. The seller's existing home is used as security for a bridge (also called swing) loan.

Mortgage Buydowns - Borrowers who want to pay a lower interest rate initially often opt for mortgage buydowns. The interest rate is reduced because fees are paid to lower the rate, which is why it's called a buydown. Buyers, sellers or lenders can buy down the interest rate for the borrower.

Combo / Piggyback Mortgage Loan Types - This type of mortgage financing consists of two loans: a first mortgage and a second mortgage. The mortgages can be adjustable-rate mortgages or fixed-rate or a combination of the two. Borrowers take out two loans when the down payment is less than 20% to avoid paying private mortgage insurance.

Mortgage Pre Approval VS Mortgage Pre Qualified

In today's market you want to be more prepared than ever. Buy obtaining a Mortgage Pre Approval before you shop for a home, you know exactly what you can afford and a pre approval gives you extra muscle at the bargaining table. You have a clear advantage over other home buyers because the seller knows that your offer is good.