Pre-approval vs. Pre-qualification
What could be more comforting than the peace of mind that goes with knowing your mortgage is fully approved?

You will have a greatlyimproved negotiating position when you are preapproved for a mortgage. Sellersare more apt to negotiate with someone who already has a mortgage approval inhand. The pre-approval letter lets the seller know they are working with aserious buyer. A preapproved buyer can also close on a property morequickly-another major consideration for a motivated seller. Obtaining apreapproved mortgage is essential in a 'sellers' market' or wheresupply is limited.

Pre-approval uses basic information as well as electronic credit reporting. It is a true mortgage commitment. This means a commitment to financing your home and an indication of the total mortgage amount available to you. Coldwell Banker Mortgage can help you through the pre-approval process. There is no charge for this service. Ask your Sales Associate for more information.

Pre-qualification, on the other hand, is not a full mortgage approval, but an estimate of what you can afford. When you prequalify for a mortgage, the lender collects basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount.

Of the over 50 different mortgage types available, the two largest categories are fixed and adjustable rate mortgages, each with advantages to consider.

Your payments are stable and predictable, but initial interest rates tend to be higher on a fixed rate mortgage than on adjustable rate loans. Many fixed rate mortgages cannot be assumed by a subsequent buyer.

The lower initial payments on ARMs make it easier for buyers to qualify. Some ARMs may be converted to fixed rate mortgages at specified times, usually within the first five years.