Qualify vs Approved
If you're thinking of buying a home, the very first step you should take is to talk with your lender. The understanding of how much you can borrow helps you to know what price range you should be looking at. The lender can guide you to the right type of loan that fits your current needs.
A reasonable understanding of how much loan you can expect to qualify for is the right step toward the goal of owning a home, and a letter of pre-approval can be the catalyst to making this happen. There is a difference between a letter of pre-qualification and a letter of pre-approval.
Pre-Qualification:
Pre-Qualification means there have been loan calculations made that show how much you “may” be able to borrow. While pre-qualification can reduce the processing time for home loans, indicate how much house you can afford and provide a certain leverage in bargaining power, it doesn’t necessarily guarantee that such a loan will, in fact, be made by a lender.
Pre-Approval:
Pre-Approval means you actually have a loan waiting, subject only to finding the home and the home appraising at the sales price. The “pre-approval” letter represents an actual commitment on the part of the lender. In order to secure such a letter it is necessary to complete a formal loan application and pay the associated fees. Credit, salary and bank funds will be checked, and if the loan is a good investment, the lender will issue a pre-approved letter that provides a commitment for a limited period of time, subject to a satisfactory property appraisal and title search.
I hope this information was helpful.
Yours sincerely,
Rick DeAguiar
P.S. If you do not have a lender, I can put you in contact with a lending professional that can assist you with getting pre-approved for a loan. Please fill out the form below for more information.
