When it comes to buying a new home, one of the first steps you’ll need to take is getting pre-qualified or pre-approved for a mortgage. But what’s the difference between the two?
Well, think of it like going on a first date versus getting engaged. Getting pre-qualified is like a first date, it’s a general idea of whether or not you’re a good fit for a loan. A lender will have you complete an application where they take a look at your income, assets, and run your credit. Then they give you an estimate of the amount you’ll likely be able to obtain.
But getting pre-approved? That’s like getting engaged, it’s a much more serious commitment. In this case, a lender will actually verify your income and assets by requesting documents from you that proves the details you provided on the application. Plus, it shows sellers that you’re a serious buyer. Having a pre-approval with your offer is stronger than having a pre-qualification letter.
So, which one should you do?
The strongest of the two is a pre-approval! It gives you a better understanding of your budget and can make the mortgage application process faster when you find the perfect home. But, if you’re just starting to look and aren’t sure if you’re ready for the commitment of a pre-approval, getting pre-qualified is a great first step. Start the process with one of our recommend lenders by clicking here or speak with your own lender!
Either way, working with a lender or mortgage broker can help you determine the best financing options for you. And who knows? Maybe getting pre-approved will lead you to finding your dream home and living happily ever after. Happy house hunting!