Q: Can you please explain the difference between being prequalified for a mortgage and having a mortgage commitment? — K.
A: When you have a mortgage commitment, the lender has agreed to make the loan you applied for in order to help you buy the specific house you’re already contracted to purchase.
It’s pretty much the last step before closing, the day you finally become the owner. I think you may be asking about the difference between prequalification and preapproval.
Those usually happen before you even start looking for your house.
When you’re prequalified for a certain amount of mortgage debt, the lender has said, “It looks as if you could handle a loan of this specific amount.”
There’s no real agreement to lend you the money, but you do have a dollar guide to use in your house hunting.
When you’ve gone through the more rigorous process of getting a mortgage commitment, you have a binding promise to lend you a certain amount.
You can count on the loan. The only requirements will be that the property is worth enough to serve as security for the debt and that no last-minute changes occur in your employment or finances.
Mom’s outlets aren’t grounded; will it hurt the sale of the home?
Q: My mother is going to sell her 1940s ranch house that has no grounded wiring to most outlets. If a home inspector pointed this out to a prospective buyer, would they care enough for it to affect the price substantially?
I’m trying to decide if I should bring it up to code myself before listing. — R.
A: Yes, a home inspector would pick up on outlets that weren’t grounded. But I can’t predict how a buyer would react. It’s not that expensive to have the work done.
You might get a couple of estimates from electricians, and you’ll be in a better position to decide.
Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope). Or readers may contact her at www.askedith.com or edithlank@aol.com.
