Everyone dreams of owning a house. To achieve this dream, much time, effort and energy could be wasted when you rush around hunting for a home that is beyond your price range. Disappointment and frustration could be avoided if you take the time to determine your exact price range or the kind of home you can afford. Prequalifying can help you in determining this.

A pre-qualification is informal discussion between your lender and you. The lender will compute an estimate of the amount you could afford for home buying based only on the information of your income and assets.

The following are required to get pre-qualified:

1. Get a referral from family or friends for a mortgage lender.

2. You also have to submit these documents such as your gross monthly income, minimum monthly fees for credit cards, monthly car payments, child support or any other payments you make every month.

3. Your lender or you could add all your debts and compare the total amount to your income to be able to come up with a total debt-to-income ratio. The percentage must be below thirty-six to get the best rate of interest. The lower the number, the better chance to qualify.

4. Secure an authorization for your lender to get your credit report. Your report also includes your FICO score, a credit scoring system used widely by lenders. A score of 680 or above is considered an excellent score with good ratios, and other positive factors will be able to give you the best rate of interest.

5. Request a prequalification letter from your lender. It should state that your financial information and initial credit were reviewed well and looks good; nevertheless, the letter should also state that it is not an assurance of a loan granted.

It is necessary to consider that a pre-qualification is the simplest document coming from your mortgage lender. This letter does bind the lender to a loan for a home sale. This will determined your chance to get a loan, but the documents you submitted are still subject for verification by the lender.

When you find a home and are ready to make an offer, get the pre-qualification letter from your mortgage lender solely for the loan that you are seeking. It is not necessary to use the same lender; you could look around and compare rates from among the many choices available.

A prequalification is different from a pre-approved. When you try to purchase in a hot market, you must secure a pre-approval before making an offer. The pre-qualification is just one way of determining the amount you can afford to purchase a property. It serves as an estimate of your purchasing capacity. Nevertheless, after getting a pre-qualification letter and after hunting for a home, the next thing you have to do is to proceed on securing a pre-approval letter for home purchase. This will give you security to purchase and gives the seller confidence that you have the capacity to purchase his or her home.

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The contemporary trends in Banking operations and services with the help of computers are quite cheering for customer. As we find information technology invading the banking sector, only banks, which used the right technology, could come out with success. Banks are required to ‘restructure’, re-invent and reengineer themselves go meet the necessary performance improvement and get the competitive edge due to the introduction of information technology (Internet Baking) being an imperative one

Application of Information Technology

Phone banking:

1. Bank on phone, provides easy access for customers to have large businesses through telephones. Data are exchanged over the phone regarding any queries, to issue instructions on balance transfer, statement of account, cheque- book, stop payments, new schemes, interest rates etc. at any convenient time and place. Tele banking has gone a long way in providing maximum customer satisfaction within the limited infrastructure.

Automatic Teller Machines: (ATM)

1. Now, the banks provide this facility in a more sophisticated way that a customer of one bank and branch can withdraw from any other banks, at any other branch, nation wide. In developed countries, this service is provided to their blue chip client globally. This is possible only through worldwide networking and communication system.

Credit cards:

These plastic cards enable customers to spend whenever he/she wants within the prescribed limits and pay later. Debit card is a prepaid card with stored value, whereas credit card is post paid with fixed limits. It is seen that spending is higher through debit cards than with credit cards currently CITY Bank and time bank have started with Debit cards and now other banks are also following these to launch their own cards.

Electronic Funds Transfer: (EFT)

Electronic funds transfer is a system of processing and communication of payment through electronic methods. EFT assumes greater significance in the banking system as the RBI also encourages the commercial banks to adopt this technique. Normally, payments are made through cash, cheques, drafts and credit cards. The latest in this process are the debit card system, charge, digital cash, and electronic purse and so on.

SPNS- (Shared payment network system):

SPNS installed by the IBA in the city of Mumbai, enables electronic banking service like cash transactions, extended hours of banking, utility payments, cheques, point of sale facilities by the SPNS can go to any ATM linked to SPNS.

Electronic Clearing Services [ECS]:

Electronic clearing of funds from one centre to another for handling bulk transactions like salary, interest, dividend, commission etc., has dispensed the cheques. A part of electronic clearing service is computerized clearing of cheques at metropolitan centers and linking with international communication system of SWIFT. These services have contributed in a great way towards improving the customer’s services globally. ECS was introduced in India in 1996. It has made it possible for customers to get the funds next day itself.

Point of sale [POS] terminal:

Payment card at a retail location for electronic transfer of fund is called POS. The client enters his personal identification number [PIN] and confirms the amount due. Customer’s account is automatically debited with the amount of purchases and it credits the retailers account POS installed at petrol stations and large retail houses are linked to banks network.

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