Determine Purchasing Power

Before you start your home search it is important that you determine how much home you can afford. Coldwell Banker Mortgage has made home buying simpler by helping buyers get 'preapproved', and not merely 'prequalified'. Whoever you choose for your financing needs, we encourage you to work with a reputable lender early in the process.

Get Pre-Approved

Preapproval vs. Prequalification

What could be more comforting than the peace of mind that goes with knowing your mortgage is fully approved?

You will have a greatly improved negotiating position when you are pre-approved for a mortgage. Sellers are more apt to negotiate with someone who already has a mortgage approval in hand. The pre-approval letter lets the seller know they are working with a serious buyer. A pre-approved buyer can also close on a property more quickly - another major consideration for a motivated seller.

Pre-approval - written loan application with documentation and approval by the lender.

Pre-qualification - conversation with a lender has taken place but nothing has been verified and no commitment has been made by the lender.

Documents Needed to Apply for a Mortgage

When you apply for a mortgage, you will need to furnish information regarding your income, expenses and obligations. It will save time if you have the following items available:
- Two most recent pay stubs
- W-2s for the last two years
- Federal tax returns for the last two years
- Last two month's bank statements
- Long-term debt information (credit cards, child support, auto loans, installment debt, etc.)

Types of Mortgages

Fixed Rate Mortgage - The fixed rate mortgage is a traditional method of financing a home. The interest rate stays the same for the entire term of the loan so the interest and principal portions of your monthly payment never increase. Your payments are stable and predictable, but initial interest rates tend to be higher on a fixed rate mortgage than on other loans. Fixed rate mortgages can be for a term of 15, 20, 30 or 40 years.

Adjustable Rate Mortgage (ARM) - The interest on an adjustable rate mortgage is linked to a financial index, such as a Treasury security, so your monthly payments can vary over the life of the loan. Most adjustable rate mortgages have a lifetime cap on the interest rate increase to protect the borrower. The lower initial payments on ARMs make it easier for buyers to qualify. Some ARMs may be converted to fixed rate mortgages at specified times, usually within the first five years. Refer to the "Consumer Handbook on Adjustable Rate Mortgages" for more important information on this type of mortgage.