It takes between 30 days and a few months to get approved for a mortgage loan. There are three steps to this process, but only the final two are required: prequalification, preapproval, and final mortgage approval.
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Mortgage brokers act as intermediaries whose job is to help connect buyers with investors and banks. Essentially, they collect your information and shop around for relevant mortgage options based on the information they collect from you. Mortgage brokers take care of all of the dirty work, so you don’t have to deal with the stress of finding lenders, getting quotes, and sitting in those highly uncomfortable waiting areas that most banks have.
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The Prime Rate is often confused with the Federal Funds Rate, a rate at which banks lend money to one another and is determined by the Federal Reserve. This is what you hear about on the news when the Fed meets. It’s not the same as the Prime Rate, though the Prime Rate often follows the Federal Funds Rate.
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DTI, or debt-to-income ratio, is a measurement that banks and other lenders use to compare an individual’s debt payments to their overall income. They usually use this as a way to determine someone’s predicted ability to repay future debts. You can calculate DTI by dividing your total monthly debt (recurring expenses only), by your gross monthly income.
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