The Difference Between Being Pre-Qualified & Pre-Approved for a Mortgage
Today’s blog I’m going to talk about the difference between between being pre-qualified and pre-approved for a mortgage. Going home searching without a preapproval is like going outside without any clothes on, OK that might be a little more extreme, because you’re not gonna get arrested for not having a preapproval letter, but wearing clothes and being pre approved will get ya closer to home ownership. 😁
Let’s talk about pre-qualification. This can be as simple as giving the lender your numbers over the phone or even online. Numbers meaning income, debts or assets. Nothing verified. Usually no credit pulled. Pre approval is where you gotta prove your numbers via bank statements, pay stubs, credit reports, employment verification and other lender requirements. Some lenders run you through underwriting ahead of time. This is even better than just being pre-approved. It helps to eliminate any last minute surprises and makes the home buying process less stressful.
Why should you get pre-approved before looking at homes?
1. You will know exactly how much you can afford payment wise and total sales price.
2. You will know what type of loan you’re gonna do, which will help us to better structure the contract.
3. If you were to look for a house and fall in love with one just being pre-qualified, you would have to go to your lender and start the process. That would waste precious time, because sellers will not accept just a pre-qualification letter. Another buyer who is pre-approved could end up getting the Home instead.
4. In today’s Covid environment sellers want to make sure the buyers who are coming into their house are serious buyers. Not that a pre-approved buyer can’t be walking around with Covid, but it does eliminate the tire kickers.
5. It adds a little layer of safety for the real estate agent. Meeting strangers can be a little nervy and sometimes dangerous, so A buyer getting pre proved can help alleviate those fears So there you have it, The difference between being pre-qualified and pre-approved.
If you’re wondering the best place to start, that is usually with your own bank, but if you don’t have a lender you trust, I can recommend a couple good ones. Just give me a call or text at 904-910-3516.
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