How are pre-qualifying and pre-approval different?
Pre-qualification is an informal way to see how much you maybe able to borrow.
You can be ‘pre-qualified’ over the phone with no paperwork by telling a lender your income, your long-term debts and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.
Pre-approval is a lender’s actual commitment to lend to you.
A Mortgage Pre-Approval is Your Ticket to a Ratified Sales Contract
It involves assembling financial records and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.
At First Title & Abstract, Inc. we believe in “Putting You First!”
And we encourage our clients to put first things first, too!
Getting pre-qualified for a loan is a good first step.
But when you get serious and are ready to shop and employ a Realtor, you should obtain a pre-approval letter as this will enhance your chances as a buyer of having your offer to purchase accepted by the seller.