When you’re buying a home, you do everything you can to stand out from your competition. One way to stand out in a crowd is by getting pre-qualified and pre-approved for a mortgage.
You may have heard about both of these and are wondering, do I need both? Which comes first? Let’s look at them side by side and find out.
Not to be confused with pre-approval, pre-qualification is quick informal estimate of how much you can probably afford. Pre-qualification does not guarantee that you will get the loan but is a quick way to see an estimate of how much you can afford when shopping for a home. How quick, you may ask? All you need is your name, phone number and some estimates that show your income, assets and debts. A lender is then able to give you a prequalification on the spot.
If you’re in the first stages of dipping your toe in the home search. Getting pre-qualified is a great way to know what’s in your budget and what’s not.
Pre-approval, for a mortgage, is a more intense and official version of pre-qualification. A pre-approval is a thorough investigation of your income, assets, credit history, rental history and debts. It will give a concrete idea of how much home you can afford, according to the lender.
To secure a pre-approval you will need, proof of income and employment, proof of assets, proof of identification and credit score. If you have all of these pieces, it will make the process go very smoothly.
While neither pre-qualification or pre-approval guarantee a mortgage, they are important steps to take if you’re looking to buy a home in today’s ultra competitive buying environment.
Our local experts at Wisconsin Mortgage Corporation are here to answer your questions regarding pre-qualification, pre-approval or anything regarding home mortgages. Learn more: