Hi,

I am going through ING direct FAQ and it has the following about the pre-approval:

"A pre-approval estimates a shopping range for new home buyers based upon their annual family income, credit history, net worth etc. and also guarantees the mortgage rates for 120 days."



For any bank, does this mortgage guaranty applies to fixed rate mortgage only or it is applicable for variable rate mortgate as well & variable rate mortgage can be locked for 120 days as well ?

Also, if it can be done for Variable rate as well, would it be locked at P-0.85 or ar 2.15% , if prime goes up ?

Are there any other terms/features that one should look for while going for the pre-approval ?


Thanks,

Quote:

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Originally posted by MeagainMe

Hi,

I am going through ING direct FAQ and it has the following about the pre-approval:

"A pre-approval estimates a shopping range for new home buyers based upon their annual family income, credit history, net worth etc. and also guarantees the mortgage rates for 120 days."



For any bank, does this mortgage guaranty applies to fixed rate mortgage only or it is applicable for variable rate mortgate as well & variable rate mortgage can be locked for 120 days as well ?

---> You can get the rate for both Fixed and variable rate

Also, if it can be done for Variable rate as well, would it be locked at P-0.85 or ar 2.15% , if prime goes up ?

----> Variable means change, so if P (prime rate - determined by gov't, currently it is at the lowest) goes up rate will go up, if it goes down rate will go down

Are there any other terms/features that one should look for while going for the pre-approval ?
-----> The main purpose of pre-approval is to see how much you are qualified for, the rates (fixed/variable) is secondary. If you are pre-approved, the seller will see you as a serious buyer. Get a copy of the pre-approved statement once it is done. The bank will have their own brokers and try to sell them to you, be careful

* Never give out your pre-approved amount to any one like your broker / potential seller etc, just say that you are qualified and I am looking in this range

* Don't get pre-approval from more than 1 bank, it will affect your credit history

* Once you get a quote and the rate, you can shop around (talk with the banks) to get the better rate

Thanks,

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