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TruMark Financial Blog
April 27, 2018

Getting a home loan

Unless you’re wealthy enough to pay the full price for your house upfront, you’ll need to arrange for a home loan, commonly known as a mortgage loan, before or after your offer on a home is accepted. In most situations, it’s actually a good idea to take care of this step before you start home shopping.

What is ‘pre-approval’?

Usually, prospective homeowners want to be pre-approved for a home ownership loan. This means the individual, couple, or group hoping to purchase a home goes to a lending institution, which then evaluates the party/parties and gives pre-approval for a mortgage loan.

The lender is simply saying you are qualified to borrow up to a certain amount of money at a specific interest rate. However, it is not a guarantee to finance whatever home you select. This promise of a mortgage hinges upon an appraisal of the property and other conditions set forth by the lending institution.

Credit report

One of the things the lender will consider is your credit score and credit report. Before you approach a lender, it’s a good idea to know what they’ll find on your credit report. Take a look at your credit report and be upfront with them about any issues so there are no surprises down the line. The ideal place to start is, which allows consumers to receive and review their credit report once a year from each of the major credit bureaus.

Pre-approval letter

If you are successful in seeking pre-approval, the lender or loan officer will furnish you with a letter outlining your pre-approval status and information. This means the loan will be approved when the buyer has made an offer, the seller has accepted it, and all the conditions stated by the lender have been verified.

Next steps

To get the actual loan, the buyer must present the following documents:

  • Purchase contract
  • Preliminary title information
  • Appraisal
  • Documentation of income and assets.

 Is that all there is?

Pre-approval for a mortgage is not a guarantee because there are potential glitches. For example, the lender needs to ensure the property’s value offers sufficient collateral for the loan. The appraised amount must be at least as much as you’re paying for the house. Other conditions may apply, so check with your lender before signing anything.

TruMark Financial is here to help with all of your home-buying needs.