Preapproval and prequalification are different. Katrina Rockel explains the differences between the two. Katrina is a rather new blogger but has done an outstanding job telling us that the preapproval is much stronger because the lender is saying the buyer has received loan approval. Prequalification is a preliminary look at the buyers credit history and income therefore the statements need to be verified. Give me a preapproval over a prequalification anytime.
Please post any comments to Katrina's blog and welcome her to active blogging.
What’s the difference between Pre-Approval and Pre-Qualification? I get asked that all the time by buyers who are interested in buying their first home. Sometime even experienced buyers will ask this question. I explain this as the first step to buying a home. I have my clients call and/or meet with one of my prefered lenders to get the process started. I recommend doing this before getting into a car and driving all over the place to look at homes, that they might fall in love with and not be able to qualify for. That can be very upsetting and once a buyer falls in love with a home and told that home is out of their price range, it’s hard for buyer’s to see other homes the same. Plus getting pre-approved or pre-qualified can help make sure nothing shows up on the credit report that can surprise you. It also gives the prospective buyer a chance to work on credit issue, should something come up. Having that peace of mind knowing what price range and payment you are comfortable with is reassuring.
Pre-Qualification is the basic step when you provide information verbally (verbal application) over the phone or fill out information on the internet. It gives the loan officer an overall financial picture based on the conversation and answers you provided to their questions. It’s also a quick look at your credit report. They will ask you questions about your income, assets, debts and other potential down payment amounts depending on the type of loan you are applying for.This step will give you a ballpark answer on what you could potential be approved up to, as well as an estimated payment.
Pre-Approval provides proof to a real estate agent and the seller that you are actually approved for a specific loan amount and the bank has verified your income, credit and assets. This step is where they gather and see the documents to support the conversation you had earlier, where they took your initial information.They can also lock you in on an interest rate after you have an accepted contract, so you will know exactly what your monthly payment will be. Peace of mind.
I work with two amazing loan officers from different local companies that have helped my client and my clients have given them awesome reviews.
Nicki Torres & Kim Evers. So if you are wanting to find out if you can get pre-approved or pre-qualified, click on their names above. Make sure to tell them Katrina recommended them :) Don’t worry, I don’t get paid to recommend them, I just like knowing my clients are taking care of from the beginning! I hope this helps you understand the difference between Pre-Approval and Pre-Qualification.
Buying a home can be very stressful and confusing and knowing your finances are taking care of can make the process run smoother and more fun. If you would like to talk about buying your first home or looking at buying another home call, text 910-583-3817, email me or visit my website to get the process started. I am here to help make this process fun!
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