The first phase is known as pre-qualification. Before you even begin the tiresome task of shopping for a home, it is very important to pre-qualify yourself as a potential borrower. This phase does not include an intense analysis of your assets, but rather a general look at your price range as a future homeowner. It can be performed by a lender, a real estate agent, or even on your own. With pre-qualification, you have an idea of what you can afford, however detailed questions still remain concerning the possibility of a loan.
The phase known as pre-approval takes a more in depth look at your buying power. The lender will analyze your income, expenses, and credit history before determining if you truly qualify for a loan. If you do, then various proposals are made and interest rates, as well as monthly payments, are estimated. At that point, you as a buyer, have a pretty clear idea of the kind of loan you might expect to receive.
The final phase of purchasing real estate is known as the letter of commitment. The letter of commitment does depend upon the appraisal of the real estate, but once this is complete, you are basically home free. When both you and the property have been approved, the lender will write out a letter of commitment stating the terms of the contract, and this solidifies the loan as a whole.
The process of purchasing a home, with its many steps, can certainly wear on you, but you must remember that there are websites that can help. The information found at http://www.1californialoan.com has been helping potential borrowers and homeowners online since 1997. Before entering that first phase of shopping for a new home, check with the experts at http://www.1californialoan.com to lessen the stress of the real estate loan experience.
