Looking for your dream home is a long process, but if you’re not prepared, it could take even longer. The last thing you want to do is to find your dream home only to miss out!
You’ve probably heard of mortgage “pre-qualification” and “pre-approval.” While they may seem interchangeable, they’re two different things you can do to set yourself apart from other home buyers and get one step closer to your dream home.
What is Mortgage Pre-Qualification?
Pre-qualification is the surface-level estimate of what you can afford and is the first step of the mortgage process. Unlike pre-approval, this step isn’t necessary. However, it provides homebuyers with a few advantages and is worth the extra paperwork.
Consider getting pre-qualified before you even start looking for a home because doing so gives you a baseline of where to start looking, narrows down search options, and helps you stay within budget. It only takes minutes, but in the long run, it will save you time. With all the other homebuyers shopping, there’s no time to waste!
What is Mortgage Pre-Approval?
During mortgage pre-approval, your lender will take a more comprehensive look at your credit and various financial documents to give you a real dollar amount that you can borrow. If approved, you receive a letter with your interest rate and offer you can show to sellers when you’re ready to close. The mortgage pre-approval letter has an expiration date set by the lender. It’s usually mentioned in the pre-approval letter, indicating how long the lender’s offer stands. After this date, the pre-approval is void, and you’ll need to reapply for a new one.
Mortgage Pre-approval gives the seller confidence knowing your offer will stand throughout the lending process. Though home prices are higher, the real estate market is booming due to lower interest rates, so many other home buyers are vying for houses. Getting pre-approved puts you ahead of the competition and into your home faster.
Home Loan Pre-qualification and pre-approval can provide you with realistic expectations, save time during your house hunting, and make your offer stand out.
If you’re looking for your dream home and need help securing a mortgage, get in touch with one of our mortgage lenders on our website, who are happy to help during this exciting time.