Mortgage 101 Lesson 2: Loan Applications
There are a lot of things to consider before you get a mortgage on a house and making a loan applications is key to getting the process started. You should probably shop around to find the best rate, and learn a few things about different types of mortgages so you can get the right one for you.
Some definitions to remember when you’re in the process:
Rate Lock – An agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage over a specified time period at the prevailing market interest rate. (from Investopedia.com)
Interest rates are always fluctuating. While you’re in the process getting your loan applications in, research and find out what a good interest rate is. If a lender offers you a really good rate, take it!
Conditional Approval – Your loan application has been approved subject to given terms and conditions that MUST be fulfilled prior to unconditional approval being issued. This can range from valuations, evidence of assets or liabilities or further information required by the lender. At this point, the lender has no obligation towards you or funding your application. (from MortgageChoice.com)
Appraisal – An appraisal is a valuation of property, such as real estate, a business or an antique, by the estimate of an authorized person. To make a valid appraisal, the authorized person must have a designation from a regulatory body governing the jurisdiction of the appraiser. Appraisals are typically used for taxation purposes or to determine a possible selling price for the property in question. The appraiser can use any number of valuation methods to determine the appropriate value to assign, including the current market value of similar properties, quality of the property and valuation models. (from Investopedia.com)
I hope you’re learning from these videos. If you have any questions or comments, contact us on Facebook!