The First Step to buying a Home: Pre-Approval
Too often, home buyers are disappointed when they find their dream home only to discover they are not able to get a mortgage to purchase the property. There are methods that potential buyers can use to ensure this does not happen. One of these options is to ensure you obtain a pre-approval from your lender. It is important to understand the difference between a pre-approval and a pre-qualification. While both are helpful, they do not carry the same weight.
What does it mean to be pre-approved for a home loan?
A Pre-approval for a loan means that you have provided information on your income, liabilities, and assets. The lender verifies your information and provides you with a pre-approval letter stating the amount you qualify for. During this process, your credit report will be pulled to verifying your credit history and credit-worthiness.
A pre-approval letter carries more weight than does a pre-qualification letter. It means that you are more likely to be approved for a mortgage It is your best leverage when making an offer on a home.
When you are “pre-approved” it means you have a mortgage commitment from your lender, making you a strong buyer. When you find your perfect home, your offer will be more seriously considered if you have a full loan commitment from a strong lender behind you.
What does it mean to be pre-qualified for a home loan?
Pre-qualified for a loan gives you an idea of how much you might qualify for. The mortgage officer has only your word on your income, assets, and liabilities. None of the information has been verified yet. The loan amount is not guaranteed. A pre-qualification letter merely states you are likely to be approved for a mortgage. This is why we only do pre-approvals.
- Save time with a loan pre-approval…no point wasting time in viewing homes you may not be able to purchase.
- Your real estate professional will be able to work faster, showing you homes that will suit your needs and budget.
- When you find the right home, you can make a strong, confident offer.
- Sellers will take you seriously knowing you’re an approved buyer.
- Your offer will be more credible than the competition because you’re prepared to purchase.
Contributing Author: Evan Jansen
Evan Jansen is a mortgage industry veteran with over 14 years of experience in the Colorado marketplace. Evan has helped more than 800 individuals finance their dream of owning a home. Let Summit Mortgage in Denver help you with all your mortgage needs. Have a question for Summit Mortgage? Leave a message and someone will be with you shortly.