One of the best ways to create success in a situation is to perform mental modeling. Pro athletes, Navy Seals, Nobel Laureates, successful CEOs and performance driven individuals use mental modeling to visualize high pressure, new situations before they perform them.

You might ask, what does all this have to do with mortgages? Good question. More than you might think. For a lot of borrowers, the mortgage process is new and can be daunting. And even for home buyers with previous experience, the home loan marketplace is constantly changing. Rates are tied to decisions made by the Fed and daily fluctuations in indexes like the LIBOR, the London InterBank Offered Rate. LIBOR is simply the interest rate that the world's leading banks charge each other to borrow money. It is used as the first step in calculating interest rates for various loans, including home loans, throughout the world. Mortgage rates change daily.

Additionally, the real estate market in today's world is competitive. The internet has given rise to the free flow of information, and many portals to access...

Whether you are buying your first home, refinancing or looking to purchase another property, the mortgage world can feel like people are speaking a completely different language. From the acronyms to the specific documentation needed for your mortgage. Not to worry.

We have compiled a list of common terminology, so you can familiarize yourself with the vocabulary used when discussing your mortgage.

Preapproval

Preapproval is the process of receiving a letter from a lender, to approve the amount they will let you borrow for a home. Many times, this is the first step in the home buying journey. To learn more about the process and what is required visit our blog on Why you Should get Preapproved.

Loan Application

This is the form used to apply for a loan as a borrower. The lender will review details about your finances to determine whether they can accept the request to grant funds for credit.

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Have you started searching for that new place to call home?

You’ve scoured the internet for the perfect home. Taken drives through neighborhoods and pictured the new life you can build there? Before you start visiting all of the open houses, pre-approval needs to be added to the list.

What does Preapproval mean and how can it help you during your home buying journey?

Preapproval is much different that pre-qualification. Preapproval brings you much more power. This is the start of the process to qualify for a mortgage. A lender is now approving the amount they will let you borrow for a home.

This means that the lender will need access to specific financial information and access to your credit report. This will result in a hard inquiry on your credit report but should not affect your score too much, if you have a strong credit score. Once a lender has evaluated documentation, they will then approve a specific loan amount, which will help you set a price range for your new home.

These approvals usually last for a particular period of...

Homebuying can be quite a stressful time and finding the funds for a down payment can add to this stress. Not to worry, there are many different ways you can fund your down payment. It is important to evaluate your assets and determine where you may be able to supply the funds from. There are many different ways to satisfy a down payment requirement, depending on what options you qualify for.

What is a Down Payment?

A down payment is the cash you’ll pay toward the purchase of your new home. The more you are able to put down upfront, the less you will have to borrow, allowing for lower mortgage payments. This is your contribution towards the initial ownership in the home and the lender provides the rest to purchase the property. Most lenders will require a down payment for a mortgage, with exceptions for VA loans and USDA loans that are backed by the federal government.

Sources of Down Payment

Sourcing your funds is key to helping you purchase your new home. Evaluating all of your options will help you determine funds...

One of the most commonly asked questions in the mortgage business is how a borrower's credit score will affect their home loan. The best answer is, your credit score aka your FICO score is a key factor in qualifying you for a mortgage and determining the rate that you would qualify at. FICO Scores can be any number between 300 to 850, with a 300 being considered a Poor FICO score and an 850 being an Exceptional FICO Score.

How does the Mortgage Industry use FICO Scores?

Mortgage Lenders, depending on the product limits use FICO Scores both as an adjustment and a qualification factor. When we speak of adjustments, we mean the rate your qualify form can be adjusted based on where your Credit Score is on the scale of 300 - 850. Industrywide it is generally accepted that a 680 - 740 is considered a good FICO Score, 740 - 800 is considered Very Good and...