Passing a Pre-Qualification in Mortgage

By Flynna Sarah Molina

In the advent of the ever evolving financial crises and upheavals, mortgage remains to be a constant avenue for acquiring any property. It has become an automatic option when one opts to buy a certain piece or parcel of land.

Mortgage is process of acquiring any property through loan application from any funding institution or agency. The mortgage provider pays off one's property from the property owner and developer. The buyer then settles his account with the mortgage provider. Usually, the mortgage providers are banks, financing houses and other financial institutions.

There are therefore, pre-qualification procedures before any mortgage is approved. The pre-qualification for a mortgage is responsible for conducting series of background investigations of applicants for loans based on a set of standards. It is also a system responsible for appraisals of all submitted collaterals, if needed and required for evaluation. Usually it takes a certain period of time before a real estate mortgage is approved. Certain considerations are taken into prior to approval. But what is indeed the role of any pre-qualification of mortgage. Here are some of them:

The pre qualification mortgage procedure usually starts with the conduct of preliminary interviews of all loan applicants upon submission of documentary requirements. Most often, there are prescribed documents prior to mortgage application. Hence a validation on submitted documents such as Certificate of Employment, audited financial statements, income tax returns, bank statements, property titles through coordination with credit groups, must be conducted.

For special cases, the pre-qualification of mortgage may require the conduct of physical and character background investigation through ocular inspection, character and loan reference interviews based on the basic criteria of credit/lending operations: Character - Reputation, integrity, word of honor of any applicant; Capacity refers to the earning capability and profit generation ability of the applicant; Capital, referring to the applicant's stability of assets; Collateral (if needed and required) property of asset that the borrower can make available to the creditor to guarantee the payment of loan; and, personal condition which are external factors over which the lender does not have control, such as health of the applicant;

The prequalification likewise performs and validates property appraisal after ocular inspection and documentary validation with respective state agencies based on zonal and market evaluation in accordance with the credit guidelines. A mortgage application report is then drafted which reports through the provision basic information and other relevant information based on the findings on the investigation conducted.

The bottomline of the conduct pre-qualification of mortgage is basically, ensuring that a prospective applicant of any mortgage in real estate or any other loan has the capacity to fulfill his obligations according to the stipulated policies and guidelines. This is very important fact that should be established, prior to any approval of mortgage application. Payment of mortgages is very important as this keeps the company resources coming and going.

The key therefore in a successful mortgage application is passing the pre-qualification mortgage procedures. Passing the pre-qualification, entails submission and complying all authentic documents required by the different mortgage providers. Honesty and accuracy in all required information is very important.

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