Mortgage concepts every buyer should know

Once loan is approved, it's best to lock rates, points immediately

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Home purchasers sometimes get into trouble because they are not clued into the sequence of steps involved in financing their purchase. These are qualification, preapproval, approval and lock. Qualification (or "prequalification," as it is often called) is an opinion that your income, assets and current debts qualify you for a loan of some specified amount. The opinion may come from a lender, a Realtor, or it may be your own based on your use of an affordability calculator. Whatever the source, the opinion does not take your credit into account, and no one is committed by it. It used to be that Realtors did a lot of qualifications, often back-of-the-envelope affairs, so that they would not waste time looking for houses in a price range the buyer could not afford. Increasingly, they ask borrowers to become preapproved by a lender because it is more reliable than a qualification, and lenders are willing to provide it free of charge as a way of stimulating business. ...