Knowing the difference between pre-qualified and pre-approved may save you thousands of dollars when it comes to the value of your mortgage.
Homeowners that want to build the necessary groundwork to buy and live in the home of their dream would be wise to listen to Ralph Waldo Emerson who put it perfectly: “The future belongs to those who prepare for it.”
Without the proper preparation, many homeowners make mistakes when it comes to the terms pre-qualified and pre-approved, and knowing the difference could make a world of difference. If you don’t know the difference, rest assured you’ve come to the right place.
Pre-Qualified
This is the initial step in the whole mortgage process. All you have to do is supply a bank or lender with your overall financial picture which includes things like debt, income, and assets. The lender then evaluates the information provided and they can give you an idea of the mortgage amount for which you might qualify. It does not take a look at your credit report and neither does it look at your ability to purchase a home.
It is not a guarantee; it is simply the amount for which you might get approved.
Pre-Approved
Pre-approved is the next step and requires your involvement. This is where you complete an entire mortgage application, then supply the lender with the necessary documentation to perform a close examination of your financial history and credit score. You can tell the specific amount of mortgage, the interest rate, and, in some cases, you may be able to lock at a specific rate. This puts you at an advantage when dealing with a seller, who will notice you are one step closer to obtaining an actual mortgage, thus, giving importance to your interest in their home.
Knowing the difference between these two may save you thousands along with a headache or two. For all of your home loan needs throughout Solana Beach and San Diego County, as well as all of California, contact Elvin Wesley at Ranch & Coast Mortgage Group Inc. We have the experience needed to make sure you get the right mortgage.
