After you have determine the area in which you want to buy a house, you need to get Pre-Approved for a home mortgage before selecting a house. In Today’s market, Pre-approval is critical to present it with purchase contract. It not only helps you narrow the field when shopping for house but also gives you the home buying power to show your realtor and seller that you are a serious buyer.
Showing sellers that you have the ability to get financing will make any offer that much stronger. To be a fully prepared smart buyer what you need is to be pre-approved, not pre-qualified.
What is the difference between Pre-approved and Pre-Qualified for a mortgage?
Pre-Qualified
A loan originator working for a mortgage lender or broker can typically pre-qualify you for a home mortgage very quickly. Loan originator will review the home mortgage application, income, assets and your credit and let your know if you are pre-qualified. Getting pre-qualified for a home mortgage is a good first step that will give you quick idea how much you can afford or should proceed to the pre-approval process. To get pre-qualified you will need to complete a mortgage application and allow the broker or lender to pull your credit.
Pre-approval
Pre-approved for a mortgage means that a lender has looked closely at your credit report, employment history, income and assets and then determined the loan programs you qualify for, the maximum amount that you can borrow, and the interest rates you will be offered.
After taking the full application and gathering required documents, Loan originator will enter the full application in the Automated Underwriter System. Automated Underwriting System then evaluate your entire application and give you the Approved/Eligible Certificate. Loan originator will then submit entire loan package with Automated underwriting Findings and supporting documents to the underwriter. The underwriter will review your credit, mortgage application, documentation, and match the information with Automated Underwriting Findings to evaluate. The underwriter will then approve you for a set loan amount and purchase price.
What should you obtain Pre-qualification or Pre-approval?
You do not want to present a seller with a pre-qualification letter if you want to be taken seriously for the house you want to present offer for. House hunting with a pre-approval letter shows the seller that you are in a great position to make a serious offer. When your purchase offer comes with a pre-approval letter, the seller will know that you have met the conditions required to qualify for a mortgage, and that you can afford to make the offer that you are making.
Once you have been pre-approved for a home loan you are ready to start shopping for the house.
After you have determine the area in which you want to buy a house, you need to get Pre-Approved for a home mortgage before selecting a house. In Today’s market, Pre-approval is critical to present it with purchase contract. It not only helps you narrow the field when shopping for house but also gives you the home buying power to show your realtor and seller that you are a serious buyer.
