Are You Pre-Qualified or Pre-Approved?
You can be pre-qualified by a lender, by an agent, by yourself. The term means that someone has taken a general look at your income and expenses and plugged them in to a debt-to-income ratio formula. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your potential to buy a home.
Bottom Line: Pre-qualifying yourself before you start looking for a home will give you a general idea of the price range you can afford.
It will not nail-down an interest rate for you, and that factor and others will affect the monthly payments a bank will allow you to carry.
When you are pre-approved, it means a lender has looked closely at both your credit report and your income. The lender will tell you the maximum amount of loan they will offer, and which loan programs you qualify for. You'll also have a better idea about your interest rate, or you might lock-in a specific rate.
Bottom Line: Now you can go shopping for a home with confidence about your buying power--but it still doesn't mean the bank will approve the loan. Your income and credit report will be checked again before closing, and the home itself must be approved.
If you like, we can get you hooked up with a lender who will give you a pre-approval so you can get started viewing homes and be prepared to buy when you find the one you want.
Phone: 1-800-252-8937 or email us.