Pre-Qualification vs. Pre-Approval
The process of home buying is a bit difficult for the new buyer, heck even for the seasoned buyer. In order to relieve some of the stress get pre-approval. Buyers who are pre-approved are taken more seriously than just being pre-qualified.
Pre-qualification is not a loan commitment from a lending institution; it is only a loan agent’s opinion that you will be able to obtain financing. Virtually anyone can achieve pre-qualification status. Pre-approval, on the other hand, signifies that the application has been taken through a rigorous procedure. Pre-approved buyers enjoy these benefits:
1. If you make an offer on a home without talking to a lender, they then set the interest rate and points. When time is of the essence you are unable to shop around.
2. Pre-approval keeps your concentration on homes that you can afford.
3. Knowing your numbers keeps you in control of your costs and payments upfront.
4. Having a pre-approval letter gives you the leg up when there is a multiple offer situation.
5. Pre-approved buyers have the ability to close quicker since most of the actual work to get approved has been completed.