If you are "pre-qualified" you have determined, with a loan officer, what price of home you can afford based on the down payment, your debts, and the amount the mortgage company will approve for your mortgage. Being "pre-qualified" is only a determination of home affordability based on income and debt. If you are "pre-approved", your credit, employment and funds have been approved by the lender.

What are Closing Costs?

Closing costs are the accumulation of charges paid to different entities associated with the buying and selling of real estate. For buyers, they are usually about 4-6 % of the total sales price of a property. Some closing costs you might encounter are: Appraisal fee, loan fees, Origination fees, Underwriting fees, Tax service fees etc..

What is a Point?

A point is one percent of the loan amount. If the loan amount is $100,000 a point would be $1000. Points are usually charged as a loan origination fee or to buy the rate of interest down for a perspective buyer. The lender or seller may use points for buying the interest rate down to a more affordable level for the buyer. Points may also be used to pay buyers closing costs when the seller is willing to pay them from their home proceeds.

What is earnest money?

When you make an offer on a home you will need to put down an earnest money deposit as a sign of good faith that you are seriously interested in buying a home. That deposit becomes part of the purchase price and is held in a trust account or escrow until there is full acceptance of the offer. Typically, an earnest money is 1-3 % of the offer amount

What is title insurance?

Title insurance protects the named insured against loss because of defects, liens, encumbrances, adverse claims or other matters not shown or disclosed to the new owner that attached before date of policy.

Is VA or FHA financing unfair to sellers?

FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash investment and at lower interest rates. The result is a larger market for sellers, who also benefit by receiving all cash for their equity.