Get prequalified, or get preapproved?

If you're considering the purchase of a new home, you may be conceed with the issue of being approved for a mortgage.

Attaining the right mortgage is a key step in the home buying process, but it doesn't have to be a stress-inducing one.

Most lenders offer prequalification, pre-approval or both to help you know where you stand. Let me explain the difference between prequalification and preapproval:

  • Prequalification: Prequalification is a preliminary estimate of how much you can afford to pay for a home based on information you provide.
  • If credit and employment information are not validated for prequalification, the results can only be considered a rough idea of a monthly mortgage payment and loan size.  This is a useful guide for you because you know the approximated affordable home price.
  • Preapproval: Preapprt and loan size.  This is a useful guide for you because you know the approximated affordable home price.
  • Preapproval: Preapproval is a written commitment from a lender to finance your home purchase up to a set amount.  This indicates that the lender has taken a close look into your financial history and has agreed to lend you a specific amount of money, reliant on certain details like a finalized sales contract and professional inspection.  Pre-approval indicates to sellers that you are a serious homebuyer.

Don't wait until you find the perfect home to discover issues/problems with obtaining a mortgage?

If you would like more information on how either process can help you get into the home of your dreams, give me a call.  I'd be happy to answer any of your real estate needs.

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