Pre-Qualification & Pre-Approval

Prequalification should be your first step when you are thinking of buying a home. If you have been pre-qualified for a mortgage by a lender, then you’ve submitted general information about yourself that is unconfirmed such as your name, your address and your financial information and based on this data, the lender has issued a pre-qualification mortgage loan amount for you.  Once you have been pre-qualified, you should strive toward becoming pre-approved.

If you have been pre-approved for a mortgage then you have given a lender authority to check your credit report and most likely also given them access to your financial data.  In return, the lender has agreed to give you a mortgage loan approval and most likely a mortgage pre-approval letter.  This letter may reflect a fixed loan amount and express your annual percentage rate.  You might also be given opportunity to lock-in your interest rate.  In addition, you’ll receive a truth-in-lending closing statement which spells out fees associated with your mortgage and how much money you will need out of your pocket to close. 

Being pre-approved is definitely superior to being pre-qualified. You can search for your home with peace of mind knowing exactly what you can afford and where your comfort zones with price range and total monthly payment are.  It relieves you of a lot of guesswork and possibly a lot of unnecessary legwork and wasted time. Through the eyes of a home seller, you are a desirable choice as a pre-approved buyer as opposed to someone who is simply pre-qualified.  Being pre-approved shows the seller that you have prepared for a home purchase in advance and that you are ready, willing and able to buy their home and you have the ability to close quickly, if necessary.   

If you haven’t started the pre-qualification or pre-approval process and you are strongly considering buying a home then it’s time to get started!  You’ll most likely need proof of pre-qualification to submit to a seller with any purchase offer that you’ll make on the property so get prepared now so you don’t lose out because you can’t prove that you qualify!  For more information on getting pre-qualified or pre-approved for a mortgage, please call TAMMY STARR at (860)739-5333 x156 or complete the form below.