Before you start your home search, you want to know how much you can afford, right?
There are two ways to do this: with a mortgage pre-qualification and a mortgage pre-approval. As a home buyer, the pre-approval is more valuable to you during your home search.
How Pre-Approval Helps You as a Home Buyer
One of the main differences between mortgage pre-qualification and mortgage pre-approval is how the lender gives you the mortgage amount.
For pre-qualification, you give the mortgage lender your general financial history (including debts and income), and the lender gives you a mortgage estimate. For pre-approval, the lender digs deep into your credit report and gives you the exact loan amount.
If you’re choosing between getting pre-qualified for a home mortgage and getting pre-approved, choose to get pre-approved. Here are the top three reasons why:
1. You Learn Exactly What You Can Afford
There are no estimates in a pre-approval. The lender has looked into your credit history and you’ve given the required documentation to go through with the pre-approval process.
A mortgage pre-approval is not a commitment to the loan, but it paves the way to transition into applying for a specific property — your dream home in your price range.
2. You Can Narrow Your Home Search
Searching through online listings can be a tedious process, especially if there are hundreds of homes for sale in the area. How do you narrow down your home search?
When you’re pre-approved, you’ll know exactly what you can afford, and tailor your home search around that mortgage amount. Now you can easily search through listings with confidence.
3. The Home Seller Takes Your Offer Seriously
Home sellers like to see that you’re pre-approved — it tells them that you’re serious about buying their home.
So when you’re competing with other home buyers to make the best offer on your dream home, being pre-approved will give you the competitive edge over buyers who are not.
We’re Your Real Estate Experts
If you would like more information about the mortgage process or on finding the perfect home that fits your lifestyle, contact us today at The Bouma Group at 734-761-3060 or email info@bouma.com and we can get started. We’d be happy to answer any questions you have. Start your home search here!