The Pre-approval process Explained


March 9, 2018…We look at 3 different parts of your finances:

1) Your CREDIT
a) Your Score helps us determine if you qualify and for which program
b) Blemishes: anything that would stop us from lending money
c) Minimum Payments on your report: Credit cards, car loans, student loans and personal loans

2) Your Income
a) How do you earn an income
b) Do you get disability or social security? Do you get paid hourly? Do you get paid a salary
c) Banks allow 50% (half) of your income to cover your monthly debts and the new mortgage payment
i) Your Mortgage Payment consists of PRINCIPAL (Paying the money back you Borrowed)
ii) INTEREST (The bank’s reward for lending money)
iii) TAXES (Your city/town’s fees for you owning the property)
iv) INSURANCE (Insurance protects your home in case of damage and protects the bank in case you
(an’t pay)

3) Your Cash in The Bank
a) This cover’s closing costs
i) Closing Costs are fees that parties involved with the transaction (Bank, attorney, Town,
etc) charge for their services
ii) ESCROW ACCOUNT: Above we listed taxes and insurance. You will pay the bank per month for
these and THEY will pay the appropriate party. Due to the dates the town and the insurance
company will require payments you will prepay money and it will be held in escrow by the
bank until these monies are due to the town and insurance company