Mortgage Pre-qualification vs. Pre-approval: What you Need to Know
Purchasing a home is a process, and in the current competitive market, it makes sense to set yourself up for a successful experience. Getting pre-qualified for a mortgage loan proves to be a key advantage.
What is a Mortgage Prequalification?
In simple terms, being prequalified for a mortgage means that a lender has collected your basic financial information, and sometimes have completed a credit check, to give you an estimate of how much house you can afford.
What is Mortgage Pre-approval?
A mortgage pre-approval is one step ahead than mortgage prequalification. For a mortgage pre-approval, you complete a mortgage application. The lender will then verify the information you provide, and will also perform a credit check. If you are eligible, you will get a pre-approval letter, which is an offer (but not a commitment) to lend you a specific amount. This pre-approval offer is valid for 90 days.
What Information Do You Need to Provide?
Mortgage Prequalification vs. Pre-approval Comparison
Pre-qualification vs. Pre-approval: Which One is Right for You?
For first-time homebuyers, a mortgage pre-approval tends to be more helpful, especially when they are establishing their budget for home buying and need an idea of how much they might be able to afford.
Pre-approval comes out really handy when the homebuyer is ready to make an offer on a house, especially in a competitive market where you might want to stand out among other potential buyers. The seller will take your offer more seriously if you have your creditworthiness and finances verified from a lender.
Affiliated Mortgage in Rapid City, SD. As a direct mortgage lender, Affiliated Mortgage, LLC’s trusted reputation is built on our resolve to build relationships of trust, respect, and high accountability.