Mortgage Monday.....Pre-qual and Pre-approval
They sound so close, but they are two different steps in the home-buying process: pre-qualification and pre-approval.
So what’s the difference, and how can you keep ‘em straight? A quick run-down:
Pre-qualification: Done over the phone or online, getting pre-qualified involves providing a mortgage lender information about your debt, income, and assets. The lender then gives you an estimate of how much you can borrow and provides a pre-qualification letter to attach to any offers you make.
Pre-approval: When you’re seriously looking for a new home, it’s time to get pre-approved. You’ll fill out an official mortgage application, provide documentation to back up your financial information, and give the lender permission to run a credit report. The lender will approve an exact loan amount with a specified interest rate, and if you’re ready, you can go ahead and lock in the rate.
Both pre-qualification and pre-approval are necessary steps. A real estate agent will help you know exactly what you need to do when, and answer any questions you have.
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