Pre- Qualification and Pre- Approval

Pre- qualification and pre- approval are important steps in the mortgage approval process and vital to your home buying search.

Pre- Qualification:

When you start to think about searching for a home to buy, you should meet with a lender to begin the pre-qualification process. The lender will give you an estimate of how much you may be able to borrow based on your finances. This process will introduce you to different mortgage options that suit your needs. This is an important step because it allows you to think about all of your assets and provides an appropriate price range for the home you want to buy.

Pre-Approval:

While pre-qualification is helpful, it is not always necessary. If you are ready to quickly move the process along and have found a lender you like, you can jump directly to pre-approval. During the pre-approval process, you will provide your proof of financial stability/ history to the lender, who will verify your income, assets, debts, and credit. You will be provided with a pre-approval letter, which states the amount and type of mortgage the lender is willing to offer, including terms. This is an important part of your home buying process because it shows sellers that you are a serious buyer and can secure a mortgage. If you are pre-approved before submitting an offer on a home, the seller knows that you are a financially sound and serious buyer.

Pre-qualification and/or pre-approval are necessary to buy a home with a mortgage. They help you determine your budget and establish search parameters for your home. They establish a relationship between you and a bank to support you. Most importantly, they allow you to make a strong offer.