I am starting to look for a home. What is the difference between being
pre-qualified and pre-approved for a mortgage?
Pre-qualification is an
informal way to see how much you may be able to borrow. You can be
pre-qualified over the phone with no paperwork by telling a lender your income,
your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive
at a ballpark figure of the amount you may have available to spend on a house.
Pre-approval carries it a
step further. It is a lender’s actual commitment to lend to you. It involves verifying your employment and
financial records and reviewing your credit history. You will need recent pay stubs, W-2’s and tax
returns, recent bank statements, long-term debt details and proof of down
payment and/or gift funds. Once you have
a purchase agreement, the only thing left to do is the property appraisal.
A bona fide pre-approval
carries more weight when presenting the offer to the seller and should make for
a quicker and smoother closing.
No comments:
Post a Comment