Pre-qualification is an informal way to see how much you maybe able to borrow. You can be 'pre-qualified' over the phone with no paperwork bytelling a lender your income, your long-term debts, and how large a downpayment you can afford. Without any obligation, this helps you arrive at aballpark figure of the amount you may have available to spend on a house.
Pre-approval is a lender's actual commitment to lend to you. It involvesassembling the financial records mentioned in Question 47 (Without the propertydescription and sales contract) and going through a preliminary approvalprocess. Pre-approval gives you a definite idea of what you can afford andshows sellers that you are serious about buying.
Find Out About Your Credit History
There are three major credit reporting companiesEquifax, Experian, and Trans Union. Obtaining your credit report is as easy ascalling and requesting one. Once you receive the report, it's important toverify its accuracy. Double check the high credit limit, total loan, and pastdue columns. It's a good idea to get copies from all three companies to assurethere are no mistakes since any of the three could be providing a report toyour lender. Fees, ranging from $5-$20, are usually charged to issue creditreports but some states permit citizens to acquire a free one. Contact thereporting companies at the numbers listed for more information.
Credit Reporting Companies Company Name Phone Number Experian 1-888-524-3666 Equifax 1-800-685-1111 Trans Union 1-800-916-8800
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