Pre-qualifying for home mortgages is a very good idea for many people. It allows you to determine how much money you can get before you go out shopping for a home. In simple terms, it allows the lender to tell you how much money they are willing to give you for home mortgages based on the information that you provide to them prior to the actual bid on a particular house.

Consumers should understand that there is a difference between pre-qualifying and pre-approval. In pre-qualification you submit the important details of your past and current credit history, along with your employment history, to the lender and the mortgage lender will determine how much money you can afford for your loan. This amount is not set in stone but will give you an estimate of the price range that you should stay within when shopping for your home. Because there is less verification, pre-qualification can take place quickly and in many cases there is no charge for it.

While this service is helpful for determining the amount of money you can spend on your mortgages it is not a binding contract on the lender. The reason it is not binding is because in this type of program you only give as much information as is needed to determine price ranges. Once you find the house that you want, you will still need to submit the usual documents. If in the course of that process it is determined that you are not as credit worthy as earlier supposed, you may not get the loan.

Pre-approval of mortgages, on the other hand, is different. With pre-approval, the lender will verify all of your submitted information. They may contact your employer, your credit union or bank, as well as other sources in order to verify your income, credit history, financial assets, and current liabilities and debts. Once this process has been successfully completed, the lender will give you a document stating that your mortgage is approved for a certain amount of money within a certain amount of time.

The major benefit of pre-approval over pre-qualifying is that you know for certain that you will get a certain amount of money for the mortgages that you are interested in. It should be kept in mind that this type of arrangement is time sensitive. The agreement may be for thirty days or it may be for a bit longer. Having your mortgages pre-approved, however, does also give you a lot of leverage with the seller. They know that you have the money available to buy their property and in most cases this allows you more negotiating power.

Pre-approval is not always free. With some lenders you may have to pay a fee for the service. This is only fair as it does take time for the lender to move through all of your documents and to verify your information. In addition, you may have to pay for your credit reports.

In both pre-qualifying and pre-approval of mortgages, if your circumstances change before closing make sure you tell the lender. Some changes, such as losing a job, may invalidate the pre-qualification or pre-approval results.

Mortgages are a mystery to those who have never applied for a mortgage loan. The most asked question: What are mortgage loan interest rates based on?

Technically, a number of factors can influence a mortgage loan interest rate. However, the two factors that have the greatest impact are a mortgage loan applicant’s credit standing and the prime interest rate.

Credit Standing

Credit standing, sometimes called credit rating or credit worthiness, is a reflection of how you have handled the debts you’ve accrued with creditors in the past. If you have lines of credit with multiple lenders and you have made regular payments to those creditors based on the terms and amounts promised, you will have a good credit rating. Today, “good” is considered a credit score of 680+. If you have established credit lines with lenders and haven’t paid, your credit rating will be poor and your credit score will be less than 550.

Prime Rate

The prime rate is the interest rate that is the basis for all mortgage loan interest rates. It’s determined by the banking industry and is based on the interest rate banks charge corporations for borrowing money. If you hear news of the prime rate dipping, expect mortgage loan interest rates to fall; if you hear about an increase, mortgages rates across may also increase.

Putting It All Together

The general rule of thumb is that those with “good credit” qualify for the lowest mortgage interest rates available; those with “bad credit” pay higher interest rates. And, since the prime rate is set independently of an individual’s credit rating, the interest rate one qualifies for is equal to the prime rate plus the rate the individual is eligible for based on their credit rating. Got it? Good!

Payday loans are also known as cash advances, payday advances or paycheck advances. They are short term loans, usually the amount ranges between $100 to $500 but the amount can sometimes be higher. A borrower can expect to pay between $15 to $30 per $100 borrowed. When thought of in terms of APR this translates to rates of 300 to 800 percent.

Payday loans have received a lot of bad press recently. The reason for this is for the questionable practices done by these companies. The practice that receives the most criticism is the high interest rates of the loan. These high interest rates are charges because the loan amounts are small and borrowed over a short period of time meaning that loan companies would not make a profit by charging rates similar to typical loans.

Another reason they are sometimes thought of as scams is that borrowers can potentially get stuck in a debt spiral and find it difficult to pay off the loan. For this reason, borrowers must make sure they have the funds in place to clear the debts on their next payday. It is very important that borrowers have a financial plan in place and do not take out a payday loan (or an loan) without proper consideration.

As you can see, it is easy to see why payday advances are sometimes criticized or thought of as nothing more than a scam to make money for financial institutions. However, most people who apply for the loans have already tried all other options available to them and sometimes the only option they have left to sort out their finances is to take out a payday loan. In this situation they can be very useful and actually will save the borrower money when compared to credit card fees.

If you are thinking of applying for a payday loan, ensure that you a reputable website such as mr payday lender and read all the terms and conditions.