Pre-Qualification
Pre-qualification means a lender has done an initial calculation of how much money you might be eligible to borrow. You provide a lender your approximate income, the amount of debt you're carrying, and other important details from your credit history. This information is subject to verification by the lender when you submit your actual loan application. There is no guarantee of a mortgage loan with a pre-qualification, as your financial situation has not been verified. But the lender may provide you with a pre-qualification letter, which has more details about your likelihood of obtaining a loan.
If you're ready to get pre-qualified NOW to start the home-buying process, shoot me a message, and I'll connect you the fabulous Benchmark Mortgage team! They will walk you through discovering the price range of homes aligns with the goals you have, and will help you develop a timeline and savings plan.
Pre-Approval
Pre-approval means your financial situation has been verified by the lender. When you are looking at homes to buy, or looking into building a new home, a pre-approval letter will most likely be requested upon submitting an offer for a home. Throughout the pre-approval process, you will fill out a mortgage loan application and provide supporting documentation. The lender will examine your financial situation - your credit report, your employment history, your income - and decide what interest rate to offer and the maximum amount you would be permitted to borrow (hint - interest rates are negotiable, so don't be afraid to ask about it!).
Once you have walked through these steps with a lender and know the ideal price point of homes you should be looking at that best suits your financial situation and the ideal timeline to be looking for a home in, you will be ready to start house-hunting (which is what tip #8 covers!).
