The Benefits Of Pre-Approval / Pre Qualification VS. Pre Approval
(Q) Can you explain to me the difference between Pre Qualification and Pre Approval
Also if I decide to be Pre-approved what documents will the lender require?
Pre Qualification Vs Pre Approval
(A) Pre-Qualification is only a loan agent's opinion that you 'll be able to obtain financing.
No verification is made, so formal approval is not issued.
Pre-Approvalmeans your loan application has been taken through a rigorous procedure. Pre-approval saves you the time of looking at houses you can't afford.
Pre-approved buyers are ahead in the home buying game. If you make an offer on a home and then apply for a loan instead of the other way around, you are at the mercy of the lender who now knows that you don't have time to shop around.
A pre-approval letter from a lender will also give you an edge when multiple offers have been made on a house. Pe-approved buyers generally close escrow more quickly, since most of the paperwork has already been taken care of.
It's up to you Weather or not you want to be Pre-approved or pre-qualified.
In today's Real Estate Market a large percentage of selling agents will not accept an offer to purchase without a pre-approval letter from the lender. If you are serious about buying I would suggest that you get pre-approved
Gather the Documents/Take a look at your Assets and Monthly Expenses
Your lending institution will ask you to give a complete profile of your financial situation. In addition to your income, your existing assets and debts will determine how much money that you can borrow.
Below you'll find a list of documents you may be required to produce regarding your financial situation when you speak to a lender. It is a good idea to gather these things now and have them on hand. You will need to provide this information for all primary and co-borrowers.
. Social Security Number
. W2 Forms from the previous two years
. Pay Stubs most recent months)
. Employment History Summary
. Bank statements for checking and savings
accounts (past 3 months)
. Creditor Information. This includes debts like:
.Child Support Payments
. Federal Tax Returns (for the past 2 years)
. Complete Record of Assets
. Stocks, bond, and investment accounts
. IRA / Retirement plan
. Life insurance policies
. Automobiles owned
. Construction loan
. Gift letters
. Documentation of other income
After looking at this information for yourself, it's time to speak to a qualified lender. A professional advisor will not only be able to give you information on the best rates and terms available in the current market, but he or she can also explain to you what options you have given your unique financial situation.
Talking to a lender at this time will help you get more accurate idea of what you can afford. When we begin to look seriously at homes you'll go back to the lender and shop around for the best loan available..
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If you are planning to Buy or Sell a home or land in West Hills, Woodland Hills or in the San Fernando Valley, I'd be happy to assist you.
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