PRE-APPROVALS VS. PRE-QUALIFICATIONS IN THE HOME BUYING PROCESS
Robert Langston
WWW.THEPOWERISNOW.COM
WHAT EXACTLY IS A PRE-QUALIFICATION?
The first step to take in the home buying process is getting prequalified; it gives you the right estimate of the amount you can loan. A mortgage prequalification is a way to learn how much you can borrow based on your financial information right now as well as the mortgage options open to you so that you can make the right choice to fit your needs and goals. To get prequalified, one usually needs to provide the bank with a complete picture of what their finances look like, including income, additional debts as well as assets. When you provide this vital information, the bank or lender reviews the information and then gives an estimate of just how much to expect as a loan. There’s no cost involved when getting a pre-qualification, and the whole process is simple and quick; it can usually take place online or on the phone. Remember that getting pre-qualified does not involve credit reports getting analyzed or a comprehensive look into the borrower’s ability to buy a home. This step only provides you with information about your needs and the right mortgage option to provide you with it.
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If you’ve tried buying a house before, then you have probably been told that there is a need to get pre-qualified or preapproved for a mortgage before you begin the search for a property. They’re not wrong on both counts; these steps are integral to the mortgage application processes and need to be completed in time. The problem however, is that most people tend to confuse the two together and use them interchangeably; we’ll be stating the key differences between the two and the role they play in the home buying process.
