Do I need to get Pre-Qualifed or Pre-Approved? Is a question a lot of home buyers ask. The answer is that every home buyer needs to be pre-approved. Especially in this market where sellers are getting multiple offer in a matter of hours.
So what's the difference between getting pre-qualified or pre-approved?
When you get pre-qualified this is a quick and fairly simple process. You would provide your income and debt obligations to a mortgage professional. Then based on the "information you tell them" they will give you a ball park estimate as to how much of a mortgage you should qualify for. A pre-qualification doesn't cost you anything to get done. With a pre-qualification your credit history is not examined and they also do not look at your income and debt to see if you can afford to pay a mortgage.
A Pre-Approval on the other hand is more in-depth. In a pre-approval your credit report will be order and you will fill out a mortgage application and usually pay a application fee at the time. You will also provide your bank statements, tax records, pay checks, and any other financial information requested. In a pre-approval they will look at your credit score and income and provide you with an actual loan amount that you qualify for so you know how much house to look for. You will also have the option of locking in your interest rate.
So as you can see getting pre-approved puts you in a better position when you're out looking for you home. Especially in this competitive market that most markets are experiencing. So now when you ask Do I need to get pre-qualified or pre-approved? You'll know the answer and be ready to buy.
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