which statement is true of both mortgages and auto loans

[ThomasWip]

1. **Pre-Approval:** Just as with mortgages, obtaining pre-approval for an auto loan can be extremely beneficial. It allows you to know exactly how much you can afford to borrow before visiting dealerships, giving you a clear picture of your purchasing power.
<h3>Down Payments: The Initial Investment</h3>


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3. **Financial Documentation:** You will need to provide extensive financial documentation to the lender, including pay stubs, bank statements, tax returns, and other supporting documents that verify your income, assets, and liabilities.
2. **Credit Check:** The lender will perform a credit check to determine your creditworthiness and assess your ability to repay the loan.
* **FHA Mortgages:** These mortgages are insured by the Federal Housing Administration (FHA), making them more accessible to borrowers with lower credit scores and smaller down payments. The FHA also provides more lenient qualifying guidelines compared to conventional loans.
<h3>Navigating the Mortgage Application Process</h3>
Auto loans, on the other hand, typically have shorter terms, usually ranging from 3 to 7 years. This shorter repayment period results in larger monthly payments but also significantly reduces the total amount of interest paid over the life of the loan.