If you are looking to purchase a Boston Luxury Condo or Apartment, and are a first-time Boston homebuyer, mortgages can be confusing and unfamiliar territory. Here, we will break it down for you and explain the terms and processes you need to get started.
The players:
When you are requesting a loan, you can choose from these three routes of investigating lending programs.
• Banker – A local bank may grant your mortgage directly if you qualify for one of that institution’s specific loan programs.
• Mortgage Broker – This is a liaison between the lender/bank and you, the homebuyer. A Broker passes on your information to a wide pool of lending programs, but you have very little control or oversight of the process.
• Mortgage Lender – A Lender can issue a mortgage pre-approval and/or loan commitment, and can explore loan programs from a variety of banks so that you get the best loan option.
What is pre-approval and why is it important?
Pre-approval for a mortgage is granted after you have submitted your loan application and your credit report has been checked. The difference between a pre-approved and an approved mortgage is merely technical – a mortgage is only approved when a specific home has been identified for the loan.
Having pre-approval makes you a more credible buyer, lets you know exactly how much money you have to work with, and allows your final purchase and move-in to be quick and easy.
Before you apply for a loan to buy your dream Boston Condo, be sure to check your credit report. You should get into the habit of doing this annually whether or not you plan to buy a home. It is now free to get a credit report (different than a credit score) through a few services. Look for any evidence of errors or identity theft so that there are no unpleasant surprises in your loan approval process.
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