Pre-Qualification vs. Pre-Approval, Know the Difference.
Thinking about buying a house soon? In a competitive market like the Bay Area, it’s easy to put things off. But as we all know when it comes to real estate, putting it off can come back to bite you. You don’t want to be kicking yourself next year at this time wishing you had taken the steps sooner. Do the work now and reap the benefits later. Don’t feel overwhelmed, if you set yourself up to win; you will get into the right house.
Before you start searching for the perfect home you’re going to want to get pre-approved. But what’s the difference between getting pre-approved and getting pre-qualified? A pre-qualification is a snapshot of your finances and gives you an “idea” of the mortgage you might qualify for. Check out the video for an in-depth, easy to understand explanation.
As you can see a pre-approval letter is a statement from a lender saying that you are eligible for a specific loan amount. This statement is based on all your financial info such as credit report, bank statements, salary, financial obligations, assets, etc. Pre-approval makes it so that your loan is only contingent on the appraisal of the home you are interested in purchasing assuming nothing changes in your finances before the loan closes.
This gives you a huge advantage making you as close to a cash buyer as possible. Don’t make the mistake of settling for a pre-qualification when what you really need is a pre-approval. In this competitive market, we take it even further. Even with a pre-approval 10-20% of the time there are still issues that can arise prolonging the process or even causing you to lose the deal.
Take a look at this short video from our partner Ed Diaz over at Fairway Mortgage. We have been working with Mortgage companies like Fairway Mortgage for almost ten years and find that this is our secret weapon, giving us a competitive edge and allowing us to serve our clients better, avoiding unnecessary issues down the road in the process.
Let us know in the comments below if you have any questions regarding the pre-approval process.