Owning a home is one of the best investments you can make. Sure, there’s a lot to think about, but no one makes it easier for you than PenFinancial Credit Union. Our Advisors are here to help design a mortgage that’s right for you.
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A pre-qualification is a basic review of your finances to determine if you would qualify for a mortgage. In general, a pre-qualification is based on unverified information you provide and does not include a credit check or any documentation, and is therefore not a firm guarantee of a loan.
Unlike a pre-qualification, a pre-approval is pretty much the same thing as applying for a mortgage, just without a specific home attached to it. As part of a pre-approval, a lender will check your credit, verify your income and employment, and commit to lending a certain amount of money. A pre-approval can show sellers that you're serious about buying a home, and that you're likely to be able to follow through on a bid, and close on their property.
The term "closing costs" refer to all of the charges you'll need to pay before your loan is completed. This can include origination fees, title insurance, prepaid escrows, and more. These costs vary, but generally, expect to pay around 2% to 3% of the home's price in closing costs.