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Know the next move
Follow the real sequence from qualification and documentation through appraisal, underwriting, conditions and closing—with the tradeoffs explained in plain English.
Learning paths
Choose a situation to narrow the guides. Choose it again to show every guide.
Foundation guides
Open a guide for the tradeoff, then the limit of what that number cannot promise.
6 guides
A letter is only as strong as the documents behind it, and neither version reviews the property.
A pre-qualification is usually a conversation about income and debts you reported. A pre-approval means credit, income documentation and assets were reviewed, and the letter still carries conditions. Neither one is a commitment to lend. Ask what was verified, which conditions are still open, and when the letter expires.
Route the property before you rely on the letter →The note rate is the interest. APR folds in certain finance charges so two offers can be compared on the same page.
A lower rate can still cost more once points, lender fees and mortgage insurance are included. APR is a comparison tool, not the payment you write each month. Use the rate for the payment, the APR for the cost of getting that rate, and the loan estimate for the cash you need at closing.
Estimate the full monthly payment →Deposits and top-line revenue are not the income most files are underwritten on.
Agency loans usually qualify on taxable income, not deposits. Deductions that help a tax return can shrink what a lender can count. Add-backs, a declining year and cash left in the business all change the file. Alternative documentation exists on some business-purpose and Non-QM lanes, and it is not automatic.
See how business-owner files are read →A lower rate has a payback period. Miss it, and the cheaper payment costs more.
A point is prepaid interest, usually 1% of the loan amount, exchanged for a lower rate. Break-even is the number of months the payment savings need to cover that cost. Selling, refinancing again, taking cash out or extending the term can erase the savings. The month count is a screen, not a tax or opportunity-cost analysis.
Run the break-even screen →Rent divided by the housing payment is the headline. The term sheet lives in the footnotes.
DSCR compares gross monthly rent with the monthly housing obligation. Which rent is used, how many months of reserves are required, the prepayment penalty, the appraisal form and the leverage cap decide whether the ratio survives. A number above 1.00 is not an approval or a quote.
Review the investor lane →A condition is something still unverified. It is not a surprise fee and it is not a denial.
The usual sequence is application, disclosures, documents, appraisal, underwriting, conditions, clear to close, then closing. The useful question is which conditions are yours, which belong to the property, and which can move at the same time. Dates on disclosures and the appraisal order are what keep the file from stalling.
Find the correct financing lane →Didn't find the question?
