Frequently Asked Question

Pre-qualification is a determination of the loan amount you’re likely to receive. It is not a guarantee of approval. To obtain pre-qualification, you usually are interviewed by a licensed loan officer who determines the pre-qualification amount. You will be issued a letter with this information that you can present when making an offer on a home. It’s important to understand that pre-qualification does not imply any obligation from the lender that you will be approved.

Pre-approval is more thorough than pre-qualification. To be pre-approved, you must submit an application and verify your credit and financial history. After you receive your pre-approval certificate, you’re in a stronger position to close earlier and negotiate a better price. It’s highly recommended that you seek pre-approval if you are shopping for a home.


  • Proof of Income – Find and make copies of your pay stubs.
  • Tax Information – Gather your W-2s, 1099s, and tax returns for the last 2 years. If you’re self-employed or an independent contractor, you’ll be required to provide your 1099-MISC information.
  • Credit Details – We’ll perform a credit check when you apply.
  • Debt Documentation – You’ll be required to provide documentation on your outstanding financial commitments. Gather materials on your current mortgage, car loans, student loans and any other debts.
  • Form 1003 — The residential loan application — including the attached Fair Lending notice, loan info sheet, and credit authorization. Note: Do not use whiteout on this paperwork. Mistakes should be crossed out and initialed.
  • Copies of W-2s or tax returns for the previous 2 years.
  • If you own rental units, provide the most recent rental agreement and tax returns for previous 2 years.
  • Your last 3 bank statements along with the most recent statements for any mutual funds, IRA/401(k), or stock accounts.
  • Settlement agreement and divorce decree (if applicable).
  • Letter explaining how you plan to utilize refinance proceeds if you’re seeking a cash-out refinance.
  • Non-U.S. citizens must present their Green Card or H-1 or L-1 visa.
  • If you’ve filed for bankruptcy, present a schedule of creditors, discharge notice, and filing.
  • If you’re applying for a second loan, include the first mortgage note.

These documents may not be all-inclusive, but by having these on hand, you will expedite the application.

Feeling lost and confused in your homebuying process? Wondering what points are on a mortgage? Which pieces of information you need to provide to get pre-qualified? Why you should lock in a rate?

Navigating the home buying process can be difficult when you have questions but can’t find personalized answers. That’s why we’ve provided free tools and resources to help answer many of your frequently asked questions about buying a home, getting pre-approved, refinancing, or building home equity lines of credit.

Click on the option below that most closely aligns with your question, no matter which stage you find yourself in the mortgage or purchase process.

Points are prepaid interest that you can pay up front. You can pay points to get a lower rate on both fixed rate and adjustable rate mortgages, but the points charged to reduce the rate may vary depending on the type of loan. One point is equal to 1% of the mortgage amount. (Example: $100,000 mortgage amount = $1,000 point)

FICO stands for Fair Isaac Corporation. This company is a pioneer and leader in credit scoring. Your FICO score is a number that tells creditors how likely you are to pay off your debts.

FICO and the credit bureaus do not disclose their exact computation methods. However, most credit scores are calculated through models that assign points to different factors of your credit history to best predict future performance. There are many commonly analyzed factors in your credit history, including:

  • Payment history
  • Employment history
  • How long you have had credit
  • How much credit you have used compared to how much you have available
  • How long you’ve lived at your current residence
  • Negative credit/financial events such as collections, bankruptcies, charge-offs, etc.

Interest rates change based on the demands of the market. When a high demand exists for loans, interest rates increase to take advantage of an active market. If demand for mortgages is low, interest rates decrease to entice new customers.

Inflation also has a major impact on mortgage rates. Inflation is associated with a growing economy. As the economy grows, the prices for goods and services increase along with it. This price inflation affects real estate along with everything else, pushing up the price for mortgages.

Lastly, the Federal Reserve has the ability to influence interest rates for the purpose of controlling inflation and employment. It can do this by raising or lowering the discount rate, and indirectly influencing the direction of the Federal funds rate.

A mortgage rate lock is a promise to you from the lender to hold a specific combination of an interest rate and points for an agreed upon time (typically 10, 15, 30, 45 or 60 days) until you can close on your home. Locking in a rate protects you from unforeseen interest rate increases that can occur in the days or weeks leading up to closing, but conversely, if the rates fall, you may not be able to take advantage of the lower rates.

Rate locks are dependent on the type of loan program, current interest rates, points, and the length of the lock. To hold a rate for longer periods of time, you usually have to agree to pay higher points or interest rates.

Private mortgage insurance (PMI) protects the lender from the costs of foreclosure. You may be obligated to purchase PMI if you can’t make a sufficient down payment of at least 20%. By purchasing PMI, you will have access to a mortgage without having to make a large down payment, and the lender is insured in the event that you default on the loan.

The price of PMI is inversely proportional to the size of your down payment. The larger your down payment, the lower the cost of PMI will be.

Talk to your loan officer before making a large purchase. Moving money around in your accounts or increasing your debt to income ratio could affect your loan.

Inspections are important to understand the condition of the home. They can also be helpful when it comes time to negotiate with the sellers, in terms of lowering the price of the home, or adding service stipulations to the contract.

An appraisal is an unbiased third-party assessment of a home’s current market value. In a real estate transaction, an appraiser completes an inspection of the home, and the lender and borrower are provided with a copy of the appraisal report to document the appraiser’s opinion of value.

The appraiser will determine the value of a property based on several factors, including the following:

  • Market research performed
  • Results of their onsite inspection
  • Property specific amenities and characteristics
  • Overall property condition and quality

Comparison of similar properties that have recently sold

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