Why is my APR (annual percentage rate) different from my interest rate?

APR is calculated by removing the financing cost of the loan from the total loan amount. Example: $100,000 loan amount with $3,000 closing costs; hence $97,000 would be used for the APR calculation.

What is the difference between pre-qualified and pre-approval?

When starting the home buying process, one of the first things you should obtain is some form of mortgage qualification. The two forms of qualification are Pre-Qualified or Pre-Approval

Getting Pre-Qualified is a non-binding agreement between the borrower and the lender. By getting pre-qualified, your lender informally estimates the amount of money you can borrow based on your income, expenses, assets, and liabilities. The loan officer will not typically investigate your credit to verify your income or debts.

Getting Pre-Approved means you have provided your lender with written evidence of your income, expenses, assets, liabilities and credits. the lender will verify your income usually with a copy of recent pay stubs or a copy of your W-2. You will then recieve a written commitment from your lender that shows you have solid credit and that you are qualified for a mortgage loan.

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