Pre-Approved vs. Pre-QualifiedApril 8, 2016
When you are in the market to buy aÂ new home for sale in Destin, Florida, you have many decisions to make. One of those is revolves around setting a price. This is where the whole “pre-qualified” and “pre-approved” debate comes into play. You have probably heard the terms a thousand times, but if you are like anyone else, it’s still difficult to fully understand the different between the two.Â
Pre-approval for a loan means that the lender is ready to provide you with a mortgage loan for a specific amount. This is based on the financial information and documentation you have provided. The lender has checked and verified this information, as well as yourÂ credit history.
Being pre-qualified is slightly less certain. It basicallyÂ means that you have not yet applied for a loan and the lender has not received documentation of your income, assets and liabilities. In other words, the loan amount is not guaranteed.Â Getting a pre-qualification is generally a simple process and you may be able to pre-qualify for a mortgage online in only a matter of minutes.
The advantage of obtaining both pre-qualification and pre-approval before you start to look for a home is that you will know in advance how much you can actually afford. You won’t waste time and energy looking at properties that are beyond your means.
Getting pre-approved enables you to move quickly when you find the perfect home or condo in Destin. The seller will know that your offer is serious, and therefore your offer will have more strength than one from a buyer who does not have his financing arranged.