One of the most essential steps for buying a home involves getting the perfect loan amount for your ideal residential property. There are many possible ways available that helps you to get prequalified to purchase a house as well as pre-approved for a home loan. Generally, this is a good idea to verify your credit before approaching step. The loan pre-qualification and pre-approval is the important terms when you are buying a house. But these terms are used interchangeably and they are not absolutely the same thing. Actually, the pre-qualification is an informal review of your qualifications which can be used possible to get the home loan without any household income object and also the asset documentation. You just make a simple call to the mortgage company and stating your asset, income and credit information.
If you make an offer only a pre-qualification for a home, then the offer is rejected by the experienced real estate agent. Actually, the mortgage application can be approved only if your offer is accepted and presented both the pre-qualification and pre-approval with the very limited guarantee. The mortgage pre-approval is the more formal review of your qualification which requires the proof of income assets and credit worthiness. However, these documents are carefully reviewed and approved by the mortgage companies by calculating the income ratio. This pre-approval attachment is much more powerful that an offer with a pre-qualification attachment so you always choose to be preapproved and prequalified with the seller and the real estate agent. You need to have a lot of confidence until the transaction will be completed.
Get pre-qualification and pre-approval for your home purchase
When you want to get prequalified for your home, you can go to online and log on to the specific lender’s website for pre-qualification or even do it over the phone. Initially, the lenders can overview your finances and some basic information like how much assets that you have already, how much debt you owe and how much income you are getting. The benefits of pre-qualification includes,
- Get an idea to get prequalified for a loan.
- Qualify your loan application get approved.
- It helps you to make plans before buy a house.
The major difference between the pre-qualified and pre-approved for a loan is the pre-approval tends to get more involved and makes you pay a fee for processing your mortgage application. The pre-qualification process does not approve anything in your credit history, but the pre-approval process can be done it. Once your loan has been approved already then you find the house and complete the details of loan application.
The pre-qualification is nothing but people can approach someone at a financial institution and discussed about the particular issue of your personal income such as commissions, income, assets and debts. After the discussion, the lender has offered educated opinion to the borrowers as how much money that you are qualified. Likewise, the pre-approval is an in-depth evaluation in which the lender goes through your paperwork like past pay checks, bank statement, credit reports, etc.