4 – What’s the Difference Between Mortgage Pre-Approval and Approval?
A mortgage pre-approval and approval are distinct steps in the mortgage process. A pre-approval is an initial review by a lender of your financial information, credit score, and other relevant factors to determine the amount they’re willing to lend you. It provides an estimate of your affordability and helps you shop for homes within your price range. However, it is not a guarantee that you’ll receive the mortgage.
A mortgage approval, on the other hand, is the final step where the lender confirms that you meet all their requirements and agrees to lend you the money to purchase the home.
5 – Can I Use My Mortgage to Cover Closing Costs?
While it’s possible to use your mortgage to cover closing costs in some cases, it’s essential to approach this option carefully. Some lenders may allow you to roll the closing costs into your mortgage, but this will increase your overall loan amount and lead to higher monthly payments.
Alternatively, you can negotiate with the seller to cover some or all of the closing costs. If you’re also selling your old home, you may use the proceeds from the sale to cover the down payment or closing costs on your new home. However, this process can be complex, so working with an experienced professional mortgage broker is crucial.