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Pre-Qualified vs Pre-Approved

May 3, 2012 |  Article By :   | 

You have decided you are ready to purchase a home, what do you need to do?  One of the most important steps is to find out from a loan officer how much house you can afford by getting pre-qualified or pre-approved.  There is no point in looking at homes if you don’t know your budget and if you want to submit an offer you need to prove that you will be good for the purchase price.  I required that all of my buyer clients are pre-approved before we go out looking.  If you don’t have a lender I work with several very good lenders that I can refer you to.There are two types of qualifying – pre-qualify and pre-approve.  Many people do not know that there is a difference but there is.

Pre-qualification is a quick and simple process.  You may not even need to meet with the banker.  This can often be done over the phone or the internet.  You give the bank your financial information and they give you an estimate of what you can afford.  This is done without providing proof of your income or checking your credit report and is often done free of charge.

Pre-approval is an indepth look at your income, credit report and general financial situation.  A pre-approval will cost you some money as you have to actually sit down with a loan officer, fill out a mortgage application and get your credit history checked.  If you want to make an offer on a property a pre-approval carries much more weight as the bank has actually documented your credit and income and can be relatively sure as to what you would qualify for.

If you have questions about this or would like me to recommend several loan officers, please contact me per phone or email.

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