PRE-APPROVAL VS. PRE- QUALIFICATION

A pre-approval indicates that a lender has taken a detailed look into your financial background and has committed to lend you a certain amount of money, pending specific property details. Because pre-approval entails a credit check and a review of supporting documentation, it’s more powerful than a pre-qualification letter, which generally only estimates what you can afford based on information you have provided.

Advantages of being pre-approved

Pre-approval offers a number of advantages over waiting to apply for a mortgage until after you have

1. Shop for a home with the confidence of knowing you are approved for the price range in which you are looking.

2. Take advantage of the preference many home sellers have for pre-approved buyers. With a pre-approval, sellers know they have a fully-approved buyer qualified to purchase their home. This often will give you an advantage over an unapproved buyer when more than one contract is presented.

3. Strengthen your negotiating position.

4. Allow your sales associate to structure the financing portion of the contract based on your financial needs.

5. Obtain a quick closing date.

6. Discover possible qualification issues early in the home buying process, minimizing last minute surprises.

When searching for a new home, the last thing you want to be concerned with is the financing. A pre-approval helps remove the stress and anxiety during the home buying process by giving you the confidence that the financing will be in place.