What are The Differences Between Pre-qualification and pre-approval?
A common mistake among home buyers, is thinking that being pre-qualified means they’re ready to purchase a home. There is however, a major difference between being pre-qualified and being pre-approved. A pre-qualification is something that a lender will send out to gather basic information about your income to qualify you for approval. They’ll ask you questions about how much money you make and how much your car payment is, things of that nature. They’ll also pull your credit and see how much credit you have. This is great starting point in the home buying process but a pre-qualification is just that, a starting point. You’ll need a pre-approval before you can make a serious offer on any homes.
For a pre-approval, you’ll need two years of tax returns and pay stubs and your lender will actually approve and verify all of the information from your pre-qualification. I can’t tell you how many times a buyer has had things come up in the pre-approval process that they were just not aware of. This leads to qualifying for less money, not qualifying at all, or sometimes even qualifying for more money than they were expecting. Every single seller today is going to want a pre-approval, so it is absolutely necessary to get one in order to buy the home you want. It’s so easy to get all of your info to your lender, whether it be through email, traditional mail, or dropping off the info to their office, so be sure you get your pre-approval done at the beginning of your buying process. I’d hate to see you miss out on your dream home because you didn’t have all your ducks in a row from the very beginning.
If you’re thinking of buying or selling real estate, please reach out to either myself or my team and we’ll help you through the process and make sure you’re making the best decisions for your future.