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Excellent Service
Bill is an exceptional loan officer. He helped us to purchase our home with very personal and professional service. He helped us navigate the whole process from start to closing without any problems. We didn't think we're qualified to purchase a house, but Bill went above and beyond to find a way to help us achieve our goal. He always responded very quickly with our requests, he would come back with different options with comparison chart to clearly indicate how much we need for down payment, monthly payments, interest rates, closing costs etc.
We would highly recommend Bill to anyone in need of lending services. In fact, we have already recommended Bill to one of our friends on purchasing a house.
๏ปฟ--- David Chan - Houston, TX
Bank Statement Lending!
William Rapp of Network Funding, L. P. was very professional and I felt comfortable in dealing with him. I will definitely recommend him to family and friends.
๏ปฟ--- Ian F - Missouri City, TX
Professionalism - Expert In Home Style Loan
Bill is an expert in the topic, his explanations and online material make a difference and he is always there from the beginning to the end. He is committed to make thing happen.
๏ปฟ--- Felipe Caldern & Carolina Angel Gutierrez
Great Service!
Bill Rapp's handling of our loan (even though out of state) was unparalleled to any service I have been through prior, including 3 different real estate transactions and multiple refinances. Extremely quick close, with great options and flexibility for my families needs. All around A+
--- Chris & Beth Sheehan - San Jose, CA
Knowledgeable and Responsive!
Bill was a pleasure to work with and he made the loan process fairly easy. He answered all questions I had very quickly and was straight forward in doing it. I would recommend Bill to others.
--- Wes Brady - Richmond, TX
Very professional and always returned our calls!
Bill takes a lot of pride in his job and is very dependable. They were very patient and understanding. He went out of his way and explained all my questions and concerns. They were very professional and returned my phone calls and emails. He did a great job and I fully recommend him.
--- Therese, Malcom & Shirley Teixeira - Katy, TX
Great Job!
Bill helped us out from beginning to end of loan process. The loan closed in a timely manner as Bill worked hard with bank to get our to the final steps.
๏ปฟ--- Kamal & Theresa Wilson - Hartford, CT
Avid Problem-Solver and Absolute Pleasure to Work With!
Bill Rapp worked very hard to ensure that we closed our loan and were able to move into our new home. He always had alternatives to any problems we encountered while closing. He worked with us from the beginning identifying solutions to any problems that we were having. He was an absolute pleasure to work with!
--- Nikita Rayani & Sanit Tejani - Houston, TX
Awesome to work with!
Being a first-time buyer I came in with lots of questions and concerns. Bill was always available for any questions I had and answered everything to my satisfaction. Bill made the loan process so painless that I could still concentrate on other things. We ended up closing early which made things even better. If you are in need of a lender and want someone who is very approachable and stays on top of your loan then Bill is your guy.
--- Cesar Raya - Richmond, TX
Loan Declined by my bank, and he saved the day!
Bill, did an amazing job helping me close on my house. He took the reigns and reassured me the best route to take to help close. He was accountable, thorough and trustworthy. I will continue to work with Network Funding, L.P. when it comes to home buying in the future because of the quality of service Bill gave.
--- Jacob Smith - Boerne, TX
Bill Rapp Will Definitely Make It Happen!
Bill is the most kind, patient and helpful person I have ever known. He answers his phone calls and emails promptly. You can ask him a million questions, and he will answer each and every one of them. Before I started working with Bill, I had been turned down for a home loan, because of some past credit issues I had, plus I was a single mother. However, once I started working with Bill, he was able to quickly get me a home loan, with a good interest rate. I would recommend that you call him, as he will help you.
--- Corinne Wilson - Roselle, NJ
Knowledgeable, Honest, Trustworthy, and Reliable!
"I will definitely keep you in mind. If anyone I know needs financing, I will send them your way!"
--- Jon & Andrea Saleem, CRPC Financial Advisor - Houston, TX
Best Dam Mortgage Guy a man could know!
"Hands down the best loan experience to date!"
--- Gabe & Chelsea Jackson - Pearland, TX
Phenomenal, Hard Working and Never Quits!
Had a stupid foreclosure that could have been avoided if exโs attny would have sent my buy out offer. So Bill was able to push this through with a 4 year foreclosure. He worked his butt off, was very diligent with his communication; and was very professional talking to me even when I was screaming and/or crying at him. Highly recommend this lender. He really go to the ends of the earth to help you!
--- Liz Keeter - Harlingen, TX
Exceptional customer service!
Bill is the most kind, patient and helpful person I have ever known. He answers his phone calls and emails promptly. You can ask him a million questions, and he will answer each and every one of them. Before I started working with Bill, I had been turned down for a home loan, because of some past credit issues I had, plus I was a single mother. However, once I started working with Bill, he was able to quickly get me a home loan, with a good interest rate. I would recommend that you call him, as he will help you.
--- Isha Lopez & Mauricio Garcia - Houston, TX
Service with a capitol S
Bill went above and beyond at every turn. He worked late on Saturday, he worked late all the time. We wanted to close ASAP and he really helped make it happen for us.
--- Jeff & Wendy Heger - Houston, TX
Best Buying Experience!
I would would highly recommend going with Network Funding LP. As a first time home buyer I didn't know what to expect. Bill Rapp was very helpful in answering all my questions and guided me through all ghe steps. I couldn't have asked for a better buying experience!
--- Tabitha Turner - Humble, TX
Would recommend him and use him again!
Very involved and professional . Kept me informed and up to date on everything that was going on Went with me closing and was very helpful and knowledgeable.
--- Kathy Ward - Houston, TX
Great experience!
Well I meet bill back in December 2016 he got recommended by my real estate agent we had a house in sight and started the process to get approved but we fail due to my work history and credit bill told me not to give up and put me in contact with a credit repair company they help me bring my score up and bill walk me thru the process of getting a new line so this time around we got approved before looking for our house after we found it we still had a couple of hick up but with bills help on Sunday 6-18-17 to be exact Father's Day bill called me to give me the great news that we had got approved and the closing date was as scheduled bill was more than just a lender to my family he became a friend and I'm alway going to have him in mind for any other financial situation.
--- Alejandres Felimon - Richmond, TX
I really liked his attitude!
I wouldn't usually say this but the way he had handled my mortgage was really pleasant. I personally enjoyed the time spent with him while we discussed feasible rates. He's a great man with a great personality and he offered really low interests as well. Definitely recommend him to others.
--- Tom Troiano - Atlantic City, NJ
He's nothing short of a miracle!
I'm a self-employed businessman and had him figure out the mortgage of the house after 30% down payment. The interest rates I received were incredibly low given what I had thought of earlier. One other important thing to note was that I hadn't really taken any loans earlier, so I had no credit history. He helped me out with all that as well so I can't really call him anything else but a miracle.
--- Fran Suarez - Cleveland, OH
He's really helpful!
I made a bid to him and the very same day he gave me an offer which I couldn't resist. It was too intimidating with those incredibly low interest rates and all, thoroughly recommend him.
--- Kenny Mickle - Houston, TX
Expeditious!
Bill was very expeditious and made it real easy going through the loan process. I felt he was on top of things.
I deal with investment properties and will more than likely call on him again.
--- Wayne King - Pensacola, FL
Bill was great!
Bill made us feel like a friend all the way thru the process. He was patient and explained everything he needed clearly. He was available ANYTIME we had questions or needed more information. Hopefully we wonโt go thru this process again anytime soon, but if we do - weโd choose Bill! =)
--- Barbra & Nick Grimmer - Austin, TX
Great broker!
Bill was a great broker to work with. As first time home buyers we had many questions about the process, Bill took the time to help us even calling us back on weekends with answers. I would not hesitate to recommend him to anyone looking for a broker to work with.
--- Murray & Lisa Turner - Pensacola, FL
Outstanding service!
I couldn't have been more pleased with Bill's level of service. He made what is typically a lengthy, arduous process far quicker and easier at every turn. I'm extremely comfortable recommending Bill to friends and family, and will definitely utilize his services again!
--- Jim Lipari - Austin, TX
9 Things Every Dentist & Doctor Should Know About Mortgages
Brew up a great cup of coffee, pull out your notepads, iPads, MacBooks or whatever you prefer to take notes withโthis post is epic and contains everything you ever wanted to know about physician loans. More importantly, youโll find step-by-step information on how to research, compare banks and negotiate to get the best mortgage rates. Letโs go!
1. Physician Loans: A History Lesson
Special mortgage products for doctors are not new, but when you compare them with the modern mortgage market (popularized by insurance companiesโnot banksโin the 1930โs), they are relatively new products that have yet to make their way into the mainstream.
Sometime in the mid-2000โs, a forward-thinking employee at Bank of America (letโs call him Steve) honed in on an interesting strategy for attracting wealthyโor soon to be wealthyโclients to the bank.
Every single year, over 16,000 fresh-faced medical school grads were being matched to their residency/fellowship programs all over the United States. The majority of these new graduates had massive student loans. In fact, according to the Association of American Medical Colleges, the average medical student in 2015 will amass over $183,000 in debt. That figure is up 2% over 2014. If you look at this situation through a traditional lens, you understand why a recent graduate would never qualify for a traditional mortgage loan: too much debt and zero income history.
Most of these students also emerged into their adult life with the preconceived notion that renting an apartment or home is not a good idea. They would prefer to purchase a home, but canโt. Finally, Steve discovered that MDs have one of the lowest default rates (.02%) of any demographic, so it was relatively safe to lend them money.
That perfect storm created the doctor loan program.
Being an astute strategist and looking to add value to the bottom line, Steve brought this idea to the upper brass at the bank in Charlotte. It took a few months to consider the strategy, vet it out and get it approved. But once implemented, the program was hugely successful. It filled a much-needed void, so the bank generated millions and millions of dollars of new revenue by originating physician loans.
Competing banks took notice. They soon carved out similar doctor loan programs, complete with unique benefits, rates, and states where a resident could purchase a new home.
Now that we understand the history and how we got here, letโs take a look at what these loans look like in general.
2. A physician loanโฆ
Requires you to invest very little money down for a down payment, usually zero to five percent of the total purchase price.
Accepts your residency/fellowship/employment contract as proof of how much money you will be making in the future. Usually, conventional mortgage underwriters look backward at your earning history in efforts to determine if youโll be able to afford your monthly payment and not default.
Might call on you to open an account with the originating bank. Typically, theyโll need you to set up an auto-draft for your monthly payment, which lowers the risk of default. Forcing you to open an account is also a way for the bank to ensure youโll be doing business other than your physician loan with them, with the hopes of converting you into a lifetime customer.
May be used by a resident or practicing physician. This is the case at 90% of the banks that offer physician loans. Make sure you inquire as soon as you can about this important distinction.Can be used on most property types (single family and townhomes), but in certain cities and regions, you may not be eligible to purchase a condo with a physician mortgage.
Does not distinguish between a conventional mortgage loan and a jumbo loan. Most banks will charge higher rates and fees on anything over $417,000, which is considered a riskier product, thus the name โjumboโ. A point of note: not all banks that offer the doctor loan program offer jumbo loans.
In some cases, lending guidelines may allow you to use money you receive as a gift for a down payment, cash reserves or miscellaneous closing costs.
Requires you to have decent credit. Typically, you need to be in the neighborhood of 700-720+. If you have scores that are over 800, congratulations. Youโre in a different league, and the absolute best rates and terms for physician loans will be available to you.
Mandates that you have a loan payment to income ratio of less than 38%, which means your monthly payment canโt equate to more than 38% of your income. This can vary with lenders, though, and is something you should ask about for when interviewing different banks.
Letโs move on to the other mortgage type so you can easily compare the two.
3. Conventional conforming loansโฆ
Require 3% to 5% down. For reference, 3% of a $200,000 loan would be $6,000. That is just what it takes to get in the door and qualify for the mortgage. This does not include any fees or percentages youโll pay your Realtor.
Require PMI (private mortgage insurance) if you donโt put 20% down or have 20% equity in the home.
Allow you to qualify with a credit score of 580 or above.
Require three months of cash in reserve that could cover PITI (principal, interest, taxes and insurance) payments on the loan.
Require proof of earnings history (W-2 forms, bank statements, and/or pay stubs). If youโre self-employed, youโll need to present two years of previous tax returns.
Use any debt (consumer, student, etc.) as factors in your debt-to-income ratios.
Require a debt-to-income ratio of 45% to 55%. This just means your debts canโt equate to more than 45% to 55% of your income.
Allow you to purchase condominiums in most markets.
Here comes the butโฆkeep in mind not all banks can loan in every one of these areas, and each bankโs doctor loan program will be unique in each state. Some banks even vary rates and terms based on the particular city.
Caliber Home Loans makes Doctor loans in all 50 states.
4. These are your options :
There are many alternatives to physician loans. Letโs take a look at the main ones:
Conventional Mortgages โ These are your typical mortgages, and encompass anything that isnโt part of a specific government loan or special program. They come in many flavors: 30, 20, 15 and 10 year fixed rate or 5/1, 7/1 and 10/1 adjustable rate mortgages (ARM). If you put at least 20% down, youโll get a better interest rate and will not have to pay mortgage insurance. This is a good idea if you have the cash.
Many banks offer options for you to pay less than 20% down. The disadvantage of putting less money down are higher rates. If youโre not able to put 20% down, the bank will require you to pay PMI.
As of September 2016, youโll have to put down at least 3% for this type of loan. Before the 2008 financial meltdown, there were many programs available that offered borrowers 100% financing. Those options have disappeared, many say with good reason.
FHA Loans โ These loans are administered and regulated by the Federal Housing Authority. They allow for lower credit scores than conventional loans and require as little as 3.5% down. They also require private mortgage insurance (PMI) on all loans.
VA Loans โ This program was created for US Military veterans and are guaranteed by the VA. They do not require a down payment or PMI, but there is an upfront fee (1.5% โ 2% depending on your down payment) with most loans.
USDA Loans โ Offered to rural, low-income borrowers, these mortgages require zero money down, are often cheaper than going the FHA route. They are sponsored and administered by the US Department of Agriculture and do require PMI.
State and Local Programs โ These programs aim to help low to moderate income buyers purchase a home. Some are aimed at certain professions like teachers, firefighters and police officers. You can find out more and see if there is something available for doctors here. The last time I checked, there was not.
5. How to compare banks and their mortgages
It may seem like a daunting task, but putting the time into up-front research is well worth the end result. For example, on a $300,000 30-year fixed rate mortgage, reducing your interest rate by just .25% will save you almost $16,000 in interest payments over the life of your mortgage.
Call Caliber Home Loans who can shop your loan to ensure you get the best mortgage!
6. How mortgage rates are determined by banks
Before we get into negotiating rates, itโs helpful to understand how banks come up with the rates they charge borrowers for their home loans. This is a fascinating, complicated process. Itโs not possible to say that interest rates are tied to one particular index, economic factor or governing body. It is possible to say that banks want to be as competitive as possible and at the same time as profitable as possible. This leads to the very strategic game that is determining their rates.
Things that influence rates include: the secondary mortgage market (how much investors are willing to pay for vast tranchesโwhich are packaged bundlesโof loans that are packaged up and sold as mortgage-backed securities), inflation rates, the price of US Treasuries, the LIBOR Bank rate and the Federal Reserve funds rate.
7. Finding the perfect home
There are many guides online that can help you define what will make the perfect home for you. HTGV, Forbes, and Houzz have put together some nice ones. Do this first, because itโs important to narrow your possibilities and focus on homes that fit your criteria.
Once you know what youโre looking for, be prepared to do a lot of virtual house-hunting. Things have changed a lot since your parents drove around with their Realtor to look at every single house they were interested in. Be very glad about that.
8. Buying a house isnโt a good idea for everyone
Letโs be honest. Sometimes, it just makes more sense to rent. If youโre not sure about where youโll be in three years, rent. If you think youโre in a declining market, and thereโs a possibility that home prices will decrease, rent. Weโve come up with a guide to help you weigh these factors: Getting a Physician Loan vs. Renting. The New York Times also put together a great interactive article called Is it Better to Rent or Buy?
In many cases, it makes more sense to buy. From a financial and psychological perspective, the benefits of homeownership are pretty compelling.
If you are saddled with consumer debt and/or excessive student loans, you also might want to pay off some of those debts before purchasing real estate, even with a physician mortgage loan. It all depends on the interest rates and terms. Check out this post on debt from Future Proof M.D. for more info and a few options.
Think about it and choose the path that is right for you.
9. You need to educate yourself
Our physician mortgage loan FAQ will answer more of your burning questions about physician loans specifically, but itโs critical you learn as much as you can about the finance and home buying process. This is the biggest purchase youโll ever make, and it pays dividends to know what youโre doing. At least know the basics. Youโll probably buy another house in your lifetime, and you can continue to build on your home buying knowledge with every purchase.
Heck. You may even be able to pass this knowledge down to your friends, family or children one day. Itโs important stuff.
Please comment below and let me know if there are other things youโd like to know. If you spot any mistakes, point them out, and Iโll correct them.
My best advice to you is to give Bill Rapp, the Mortgage Viking, a call today to discuss the next steps: 281-222-0433.
๐ก Mortgage Pre-Approval: Your Complete Guide ๐
๐ก Mortgage Pre-Approval: Your Complete Guide ๐
Get Mortgage Pre-Approved Before Buying a Home! ๐
_______________________________________________________________________
๐ก Mortgage Pre-Approval: Everything Homebuyers Need to Know
Before you start shopping for your dream home, there's one important step that could save you time, money, and frustration: getting mortgage pre-approved.
Whether you're a first-time homebuyer, relocating to Texas, purchasing a larger home, or buying an investment property, understanding the mortgage pre-approval process can help you make smarter financial decisions.
A mortgage pre-approval gives you an early assessment of how much financing you may qualify for, what loan programs may be available, and what potential obstacles you should address before making an offer.
I'm Bill Rapp, CCIM, with Medallion Funds, and in this guide, I'll explain how mortgage pre-approval works, what lenders look for, which documents you'll need, and how to position yourself for a smoother home purchase.
What Is Mortgage Pre-Approval?
Mortgage pre-approval is a lender's preliminary assessment of your ability to qualify for a home loan.
During the pre-approval process, a lender or mortgage broker evaluates your financial information, which may include:
ยทCredit history and credit scores
ยทEmployment and income
ยทMonthly debt obligations
ยทBank accounts and available assets
ยทDown payment funds
ยทProposed loan amount and mortgage program
Depending on the lender, pre-approval may involve verifying financial documents and reviewing automated underwriting findings.
Once the initial review is completed, you may receive a mortgage pre-approval letter outlining a proposed financing amount and applicable conditions.
Important: A mortgage pre-approval is not a guaranteed mortgage commitment. Final approval generally depends on underwriting, updated documentation, acceptable property conditions, appraisal requirements, title review, and other lender conditions.
Mortgage Pre-Approval vs. Pre-Qualification: What's the Difference?
Although the terms are sometimes used interchangeably, pre-qualification and pre-approval can involve different levels of financial review.
Mortgage pre-qualification is generally an early estimate based on information you provide. It may involve limited documentation or verification.
Mortgage pre-approval typically involves a more detailed assessment of your income, assets, debts, and credit.
For example, a buyer might receive a preliminary estimate that they could afford a $400,000 home.
After reviewing verified income, outstanding debts, and available funds, the lender may determine that a lower or higher purchase price is more appropriate.
The actual level of verification varies by lender, so ask what your pre-approval includes.
My recommendation: Whenever possible, obtain a documented mortgage pre-approval before making an offer on a home.
Why Mortgage Pre-Approval Matters Before House Hunting
1. Understand Your Buying Power
Mortgage pre-approval helps you estimate how much you may be able to borrow.
However, your maximum qualifying loan amount isn't necessarily your ideal borrowing amount.
Your actual housing budget should account for:
ยทPrincipal and interest
ยทProperty taxes
ยทHomeowners insurance
ยทMortgage insurance, when applicable
ยทHOA dues
ยทMaintenance and repairs
This is especially important for buyers in Katy, Fulshear, Houston, and other Texas communities where property taxes and insurance can materially affect monthly housing costs.
2. Strengthen Your Purchase Offer
A seller wants confidence that a buyer can complete the transaction.
A well-supported pre-approval letter may make your offer more credible because it demonstrates that you've already begun the mortgage qualification process.
In competitive housing markets, this preparation can help you move quickly when the right property becomes available.
3. Identify Financing Problems Early
Your lender may discover issues involving:
ยทCredit report inaccuracies
ยทHigh debt-to-income ratios
ยทInconsistent income documentation
ยทInsufficient verified funds
ยทRecent employment changes
ยทLarge unexplained bank deposits
Addressing these issues before entering a purchase contract may help prevent avoidable delays.
4. Compare Mortgage Programs
Getting pre-approved also creates an opportunity to explore financing options.
At Medallion Funds, we help eligible borrowers evaluate conventional, FHA, VA, jumbo, doctor loan, and other mortgage solutions.
Program eligibility, pricing, and requirements vary.
What Documents Do You Need for Mortgage Pre-Approval?
Preparing your documentation before applying can make the process more efficient.
For W-2 employees:
ยทRecent pay stubs
ยทW-2 forms, commonly covering the previous two years
ยทRecent bank statements
ยทGovernment-issued identification
ยทEmployment history
ยทTax returns when required
For self-employed borrowers:
ยทPersonal and business tax returns, when required
ยทBusiness financial statements
ยทBank statements
ยทBusiness ownership documentation
ยทAdditional income verification requested by underwriting
Some borrowers may qualify for alternative-documentation mortgage programs, including certain bank statement loans.
These programs have their own eligibility standards, pricing, and documentation requirements.
For veterans and active-duty military borrowers:
VA mortgage applicants may also need a Certificate of Eligibility, which establishes whether they meet applicable military service eligibility requirements.
Your mortgage professional can help identify which documents apply to your specific situation.
What Credit Score Do You Need for Mortgage Pre-Approval?
There is no single minimum credit score that applies to every mortgage program.
Credit requirements vary by loan type, lender, and overall borrower profile.
For example:
Conventional loans: Many lenders use a 620 benchmark, although some automated underwriting paths and lenders may have different requirements.
FHA loans: FHA policy generally permits qualifying borrowers with credit scores of at least 580 to access maximum financing, subject to lender standards. Certain borrowers with scores between 500 and 579 may be eligible with at least 10% down, although many lenders impose higher minimums.
VA loans: The VA does not establish a universal minimum credit score, but individual lenders may apply their own requirements.
Jumbo loans: Credit requirements are often more restrictive, although they vary considerably.
A stronger credit profile may improve your financing options and potentially reduce borrowing costs.
Before applying, avoid opening unnecessary new credit accounts or taking on substantial additional debt.
How Does Debt-to-Income Ratio Affect Pre-Approval?
Your debt-to-income ratio (DTI) compares your monthly debt payments with your gross monthly income.
The formula is:
DTI = Total Monthly Debt Payments รท Gross Monthly Income ร 100
For example:
ยทGross monthly income: $10,000
ยทExisting monthly debt payments: $1,000
ยทProposed monthly housing payment: $2,500
ยทTotal monthly obligations: $3,500
Your estimated DTI would be:
$3,500 รท $10,000 = 35%
A 35% DTI may be acceptable for many mortgage programs, depending on other underwriting factors.
However, lenders consider more than just your DTI. Credit history, assets, reserves, loan-to-value ratio, and program guidelines also matter.
How Long Does Mortgage Pre-Approval Take?
Some straightforward mortgage pre-approvals can be completed the same day or within one to three business days after the lender receives the necessary information.
More complicated applications may take longer.
Common reasons for additional review include:
ยทSelf-employment income
ยทMultiple properties
ยทVariable compensation
ยทRecent job changes
ยทComplex asset documentation
ยทCredit issues
Submitting complete, accurate documentation early can help streamline the process.
How Long Does a Mortgage Pre-Approval Last?
Many mortgage pre-approval letters are valid for approximately 60 to 90 days, although lender policies differ.
Credit reports and supporting financial documents also have their own age requirements.
If your pre-approval expires, your mortgage professional may request updated documents or credit information.
You should also request a new review if your financial circumstances change significantly.
Does Mortgage Pre-Approval Hurt Your Credit?
A mortgage pre-approval may involve a hard credit inquiry, which can temporarily affect your credit score.
However, credit scoring models generally provide a shopping window during which multiple mortgage inquiries may be treated as one inquiry for scoring purposes.
The applicable window varies by scoring model, commonly ranging from 14 to 45 days.
Shopping for mortgage financing within a concentrated period can help limit the scoring impact.
How Much Should You Get Pre-Approved For?
Suppose a lender determines that you may qualify for a $500,000 purchase price.
That doesn't mean you should automatically shop at $500,000.
You may prefer a $425,000 home because it leaves additional room for:
ยทEmergency savings
ยทRetirement contributions
ยทChildcare and education
ยทHome improvements
ยทTravel and lifestyle expenses
The best mortgage isn't always the largest mortgage you qualify for. It's the mortgage that fits your financial goals.
Real-World Example: Buying a Home in Katy, Texas
Imagine a couple purchasing a $400,000 home in Katy.
They plan to use a conventional mortgage with 5% down.
Their preliminary financing structure might look like this:
Item | Amount |
Purchase price | $400,000 |
Down payment (5%) | $20,000 |
Estimated loan amount | $380,000 |
Illustrative interest rate | 6.50% |
Loan term | 30 years |
Principal and interest | Approximately $2,402/month |
The 6.50% interest rate is hypothetical and is not a current rate quote.
The monthly principal and interest payment does not include property taxes, homeowners insurance, mortgage insurance, or HOA dues.
The lender must consider those additional housing expenses when evaluating affordability and qualification.
By getting pre-approved first, these buyers can better understand their estimated payment, required funds, and potential financing limitations before submitting an offer.
Common Mortgage Pre-Approval Mistakes to Avoid
Mistake #1: Waiting until you find a house.
Starting the financing process early gives you more time to address problems.
Mistake #2: Making large purchases before closing.
Financing a vehicle, furniture, or appliances may increase your DTI and affect qualification.
Mistake #3: Changing jobs without discussing it with your lender.
Employment changes can require additional income verification.
Mistake #4: Moving money between accounts without documentation.
Large transfers and deposits may create additional underwriting questions.
Mistake #5: Confusing pre-approval with final approval.
A pre-approval does not eliminate property-specific underwriting requirements.
Mistake #6: Focusing only on the interest rate.
Closing costs, mortgage insurance, lender fees, discount points, and loan structure all affect your total financing costs.
Why Work With a Mortgage Broker for Pre-Approval?
A mortgage broker can help you evaluate loan programs from different wholesale lenders rather than relying exclusively on one institution's offerings.
At Medallion Funds, we focus on matching borrowers with financing solutions suited to their financial circumstances and long-term goals.
We work with a variety of borrower profiles, including:
ยทFirst-time homebuyers
ยทVeterans and military families
ยทDoctors and dentists
ยทSelf-employed professionals
ยทReal estate investors
ยทBuyers seeking jumbo financing
ยทBorrowers exploring construction or renovation loans
Not every lender offers every program, and not every borrower qualifies for every option.
The value of working with a knowledgeable mortgage professional is understanding your alternatives before committing to a financing strategy.
Frequently Asked Questions About Mortgage Pre-Approval
Can I get pre-approved before finding a home?
Yes. In fact, getting pre-approved before shopping is generally advisable.
Do I need a down payment to get pre-approved?
Not necessarily. Eligible borrowers may qualify for VA or USDA loans with no required down payment. Other programs may offer low-down-payment options. Closing costs and other cash requirements may still apply.
Can self-employed borrowers get pre-approved?
Yes. Self-employed borrowers may qualify using traditional income documentation or certain alternative-documentation programs, depending on eligibility.
Can I get pre-approved with student loans?
Yes. Student loans are generally considered when calculating qualifying debt obligations, but the treatment of payments varies by program.
Can I get pre-approved by more than one lender?
Yes. Comparing multiple mortgage options can help you evaluate rates, fees, and loan terms.
Is pre-approval a guarantee that my mortgage will close?
No. Final approval depends on satisfying all applicable lender and property requirements.
Ready to Get Mortgage Pre-Approved?
Buying a home is a major financial decision, and preparation matters.
Before touring homes, take time to understand your credit, income, debt obligations, available funds, and mortgage options.
A properly structured mortgage pre-approval can help you shop confidently, make more informed offers, and avoid unnecessary surprises.
I'm Bill Rapp, CCIM, with Medallion Funds. If you're considering purchasing a home, let's evaluate your financing options before you start shopping.
Bill Rapp
Partner & Director of Capital Advisory | Medallion Funds
Commercial Lending Nationwide
Residential Lending in AL, CA, CO, NV & TXBottom of Form
๐ Call or Text: 281-222-0433
๐ Website: https://billrapponline.com
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ยฉ Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
Main Office:
Medallion Funds
[email protected]
11920 Southern Highlands PKWY Suite 302Las Vegas, NV 89141
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