How much home can you afford? How do you even begin to find the answer to that question? You’ve probably heard terms like “pre-approval” and “pre-qualification” tossed around, but do you understand the difference between the two? If your answer is “no,” then here’s the information you need.
“Pre-qualification” is a fine place to start, but if you’re really serious about the time and money you’re going to invest in purchasing a home, you might want to focus on getting a “pre-approval.” The pre-approval is secured when you complete and submit a loan application, along with the appropriate documentation and fees.
The lender will review your application and paperwork, and will notify you of just how much financing you can secure. Then you will have the confidence to make your home choice and make your offer.
A pre-qualification, on the other hand, is more informal, and only an estimate of the funds for which you qualify. You can, however, make an offer with a pre-qualification letter from your lender.
Getting a pre-approval is taking your pre-qualification one step further and will guarantee your peace of mind in the purchase of your home. Talk to your trusted, local lender and get started with your approval process. It will make the entire transaction smoother.