01 / GETTING STARTED · 1 MIN READ
What a preapproval
tells you.
A useful starting point, with more steps ahead.
A preapproval letter generally describes a lender’s tentative willingness to lend, based on the information reviewed. It can help you understand a potential budget and show a seller that you have started the financing process.
It is not a guarantee of funding. The lender still needs to confirm the required information and evaluate the property. The review behind a letter varies, so ask what has already been verified, what remains outstanding, and when the letter expires.
Getting a preapproval does not commit you to that lender. You can still compare financing options before choosing your mortgage.
Bring this question“What documents or conditions remain before my financing can move forward?”
Source: Consumer Financial Protection Bureau — Get a preapproval letter ↗
02 / COMPARING OPTIONS · 1 MIN READ
Look beyond
the interest rate.
The right comparison includes the full picture.
When comparing Loan Estimates, check that the loan amount, loan type, and rate-lock assumptions are comparable. Offers prepared on different days may reflect different market conditions.
Review the projected monthly payment, including mortgage insurance and estimated taxes and insurance where shown. Then compare origination charges, points, lender credits, and the cash needed at closing. A lender credit can reduce upfront costs while affecting the rate, so ask about the tradeoff.
Use the Loan Estimate’s comparisons to discuss the cost over the time you expect to keep the loan. Some expenses are estimates; ask which can change and why.
Bring this question“How do these options compare if I keep this mortgage for five years?”
Source: Consumer Financial Protection Bureau — Compare and negotiate your loan offers ↗
03 / BUSINESS OWNERS · 1 MIN READ
Prepare your
income story.
Help your loan officer understand the business behind your income.
For conventional financing, a lender evaluates the stability of self-employed income and the business’s ability to keep generating it. A large deposit or strong revenue month alone does not establish qualifying income.
Be ready to discuss your ownership, time in business, income trends, and business obligations. Personal and business tax returns, financial statements, and other records may be requested; the exact list depends on the program and your file.
If you plan to use business funds for a down payment or closing costs, discuss that early. The lender may need to assess how the withdrawal affects the business. Different documentation programs have their own requirements.
Bring this question“Which records will you use to evaluate my income, and what should I prepare first?”
Source: Fannie Mae Selling Guide — Self-employed borrower review ↗