What are the differences between mortgage prequalification, preapproval and final loan approval?
Prequalification is the process where the lender will look at a basic copy of your credit report and use the information you supply to determine how much mortgage you can afford based on your income. No accounts or employment information is verified. Preapproval occurs when all credit and employment is verified and the mortgage is approved, subject to the appraisal of the property you have chosen to buy. Final loan approval occurs when the property has been appraised, all documentation is in the hands of the lender and all contingencies have been met.

What first-time buyer programs are available?
Many first-time buyer programs are locally developed and administered. Your state, province or local community is much more likely to have a program available than on a national level. Your Agent can generally review with you the availability of programs in your area.

There seem to be so many mortgage programs and offers available. How can I compare them?
This can be confusing! You will want to consult a few sources, including a local bank that has mortgage availability and a mortgage broker, who will deal with several different lenders.

What mortgage options are there for those with poor credit?
There are lenders available for many of those with tarnished credit records. One of the mistakes commonly made by homebuyers involves their credit report. Some buyers assume that their credit is worse than it really is, and may well have been able to secure a more advantageous mortgage. Other buyers are unaware of problems in their credit report and need to scramble to get the problems handled. You can avoid many of these hassles by getting a copy of your credit report up-front and examining it both for errors that need to be corrected and accounts that need to be handled. You can get a free copy of your credit report here as well as 30 free days of the CreditCheck Monitoring Service.

What options are there for buyers with no money down and no cash for closing costs?
Although there are some new programs that allow buyers to purchase a home with little or no cash, you will generally need some funds for downpayment, closing costs or both. Since a mortgage payment will take a good percentage of your income, lenders will usually want you to be "involved" (meaning having your money involved) from the very beginning. There are options for low downpayment (5% or less) mortgages such as FHA mortgages and there is always the possibility that the seller could absorb some of your closing costs (which are usually 3-5% of the selling price) but to buy a home with no cash down is a rare occurance. If you have cash for closing costs, though, and excellent credit, there are new options in the conventional loan arena.