FAQ Categories Archives: Buyer Frequently Asked Questions

What is homeowners association (HOA)?

Homeowners association is a nonprofit association that manages the common areas of a condominium or “planned unit development” (PUD). Unit owners pay a fee to the association in order to maintain areas such as a pool or playground that are owned jointly.

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What is a REALTOR®?

A REALTOR® is an agent or agency that belongs to the local or state board of REALTORS® and is affiliated with the “National Association of REALTORS® (NAR). They follow a strict code of ethics beyond state license laws and also sponsor the Multiple Listing System (MLS), which is used to list houses for sale.

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What is the difference between being prequalified and preapproved for a loan?

If you’re prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information you provide to the bank is accurate and true. This is not as strong as a preapproval.

If you’re preapproved, it means that you have undergone the extensive financial background check, which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan, basically meaning you’re approved!

You will usually be provided an accurate figure which shows the maximum amount that you are approved for. Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.

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What is a gift letter?

A gift letter is when an individual gives you money for a down payment as a gift, that person must write you a gift letter so that it can be included in your loan documentation.

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