Posts tagged with "mortgage"

Preapproved vs. Prequalified. Is one more important than the other?

Do you know the difference between being preapproved and prequalified when buying a home? And is one more important than the other in today’s market? If not, you must read on….

First of all, what does Prequalified mean?

Getting prequalified for a mortgage loan requires that you select a mortgage lender (Don’t know who to call? I have a few that I worked with for years and come highly recommended) to work with and obtain your loan. A Mortgage Pre-qualification is a promise from the lender that you’re qualified to borrow up to a certain amount of money at a specific interest rate, subject to a property appraisal and other documentation.

So what does Pre-approved mean?

Being preapproved means that you have gone through the pre-approval process with a lender. It includes filling out an application, providing financial documentation, and a credit check. A mortgage pre-approval letter is a document from a lender that states you are preapproved for a loan for up to a specific dollar amount. Read more

So to answer the question, Is one more important than the other?

Being preapproved can make the difference when you are ready to make that offer in today’s market. And unfortunately, we are starting to see a pattern of deals falling through due to financing. At what seems like the eleventh hour, several buyers are learning that the amount they were prequalified for was overestimated, and they can no longer afford the house they fell in love with and have to walk away. Being preapproved can help alleviate this type of stress.

There are a lot of moving parts to the home buying journey. If you need some help talking through this financial piece, call me at 317-625-0655. I am here!

For more Helpful Resources on Financing, Click here

How to Qualify for a mortgage with Student Loans


Getting qualified for a mortgage loan so you can buy that house you really want can be a real *#%$! challenge.  Here’s some insight that just may help you get prepared, compliments of Mike Wickham over at Caliber Home Loans (one of my preferred lenders btw).

Good Day!

You might have heard over the last 12 months or less that all loan programs have changed in regards to what lenders will use for a monthly payment when qualifying a borrower/s with student loans. Many borrower/s are on an income based repayment plan with no payment or very little. Most loans will not allow no payment or a payment that is not fully amortized. Most loans programs will require 1% of the balance or to document the fully amortized payment if less than 1%. This can really have a huge impact on the borrower/s ability to qualify. Please be aware that on Conventional loans here are the general guidelines from Fannie Mae and Freddie Mac:

 Fannie Mae:

  • For all student loans, whether deferred, in forbearance, or in repayment (not deferred), must include a monthly payment in the borrower’s recurring monthly debt obligation when qualifying the borrower. One of the below options below must be used to determine the repayment amount:
    • 1% of the outstanding balance; or
    • the actual payment that will fully amortize the loan as documented in the credit report, in documentation obtained from the student loan lender, or in documentation supplied by the borrower.
    • a calculated payment that will fully amortize the loan(s) based on the documented loan repayment terms; or
    • if the repayment terms are unknown, a calculated payment that will fully amortize the loan(s) based on the current prevailing student loan interest rate and the allowable repayment period shown in the table below.

Freddie Mac:

  • If no monthly payment is reported on a student loan that is deferred or is in forbearance, and there is no documentation in the loan file indicating the proposed monthly payment amount (e.g., the loan verification letter), 1% of the outstanding balance will be considered to be the monthly amount for qualifying purposes.
  • Examples of documentation of the required payment amount include
    • A direct verification obtained from the creditor
    • A copy of the installment loan agreement obtained from the Borrower, or
    • If payments are currently deferred, the payment amount that will be required once the deferment or forbearance period has ended, as stated in a copy of a financial institution’s student loan certification or the installment loan agreement.

We can use Fannie or Freddie and will evaluate each scenario to use the best route for the borrower/s.

Have a great day/week!


Mike Wickham
Loan ConsultantNMLS: 505614

Caliber Home Loans, Inc.
10022 Lantern Road Suite 600

Fishers, IN  46037

Mobile: 317-260-1563 |Office: 317-576-4115

EFax: 877-673-0432


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Mortgage Rates are Greaaaaat!

Actually, that’s an understatement.  Take a quick look at this graph and you’ll get the idea.

mortgage rates 2016


The average rate across the nation for a 30 year fixed rate mortgage is just 3.65%.  That makes for a $643 monthly loan payment on the median average house in central Indiana (assuming a 5% cash down payment).  Ten years ago the rate was 3% higher and the payment on the same priced house would’ve been $902.  Now that’s a huge savings!

Today’s low rates help both buyers and sellers.  Buyers can purchase more house at a low monthly cost, and that allows more sellers to sell their properties.

If you’d like a hand understanding how you can take advantage of today’s low mortgage rates— call me.

 “I work harder to make good things happen!!”