As a buyer, it’s important for you to know the difference between pre-qualified and pre-approved. If you work with us, we will ask you to get pre-approved as opposed to pre-qualified for the below reasons:
Pre-Qualification is only an initial look at your mortgage options; it will give you a ballpark figure of what you may be able to qualify for. Key words, may be, this is not a for sure thing. Just because you get pre-qualified for a mortgage does not mean you will get one. When a buyer goes to get pre-qualified, a lender will discuss the buyer’s credit, income, and assets. This does not include an analysis of the buyer’s credit report. A buyer should not be looking at properties with just a pre-qualification.
Pre-Approval basically means the buyer can get the ball rolling on the home buying process. A pre-approval requires you to submit a number of documents to your preferred lender. Once those are submitted, the buyer will receive a pre-approval letter within 2-3 business days. The pre-approval letter is so important because it shows the amount you can afford to purchase in a home. The letter will also help you understand how much your monthly payments will be and how much you’ll be paying in taxes each month. Getting a pre-approval letter is a huge advantage to the buyer and Realtor. If you work with us, we won’t even put an offer in on a home unless you’ve been pre-approved. It’s that important.
Please note: A pre-approval doesn’t guarantee that you’ll be approved for the loan when the time comes, however, it does mean that it’s likely (much more likely than with a pre-qualification) as long as you keep your finances healthy between now and then.
Knowing the difference between pre-qualification and pre-approval will make all the difference in your home buying process. Most Realtors will not accept an offer with just a pre-qualification letter and will require you obtain a pre-approval letter instead.
Questions about the two? Just call me at 717.963.0016 or email at firstname.lastname@example.org.