Are you pre-qualified or pre-approved for a loan?
Before you begin to shop for a new home, you should set aside some time with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.
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What Is a Mortgage Preapproval?
Mortgage preapproval is the process of determining how much money you can borrow to buy a home. Lenders look at your income, assets and credit score and determine what loans you could be approved for, how much you can borrow and what your interest rate might be.
Without your credit report, your lender can only give you rough estimates. This means the approval amount, loan program and interest rate might change as the lender gets more information. A prequalification is different – it is an initial review of your finances, you usually don’t need to supply documentation (like bank statements and pay stubs) during this stage.
Preapprovals for a mortgage are more in-depth than pre-qualifications. When you get preapproved, you may be required to provide information or documents like bank statements and pay stubs to prove your income and the funds you’re using to get the loan. A preapproval will also require a hard credit check so your lender can get your credit score and see how much other debt you have.
To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you.
If you are purchasing a home or looking for a new mortgage, call Ruth. Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater and Tampa Bay area, and serving all of Florida. For more information, go to her web site at www.ClearwaterMortgageBroker.net or call at 727 447-2418.
Ruth Schoenherr NMLS 336647 Innovative Mortgage NMLS 250769