Pre-Qualified or Pre-Approved:
What’s the Difference?
If you are thinking about buying a home soon, one thing on your mind is probably obtaining a mortgage. While you need to have an accepted offer on a home to start the process of getting an actual mortgage, there are steps you can take while you are still searching for your dream home. Pre-approval and pre-qualification are two steps that will help you determine how much house you can afford, but which is better to have?
What is Pre-Qualified?
Becoming pre-qualified is a fairly simple process and usually involves minimal paperwork from you. You provide a lender with your basic financial information including your income, assets, and debts, and the lender then gives you a price range. You usually won’t be required to submit proof of your information and most lenders will not pull a copy of your credit report.
What is Pre-Approved?
Pre-approval is a much more involved process and involves a significant amount of paperwork along with a formal application. Your credit report will be thoroughly examined, and so will your bank accounts, credit accounts, and employment history. The lender will then provide you with a specific amount or cap on how much you can borrow, and you can sometimes lock in an interest rate at that time.
Which to Choose?
Pre-approval is best if you are actively seeking a home and ready to make an offer if you find the right one. Sellers take offers from buyers who are pre-approved more seriously, and you will have a good idea of what terms to expect from your lender when you finalize the mortgage. We recommend the pre-qualification process for anyone still in the earliest stages of buying a home, especially if you are unsure about your finances. The pre-qualification process can help you identify any trouble spots in your financial history to work on correcting while giving you an idea of how much you can afford so you can start working on that down payment.
Make the Most of Online Property Searches
The internet has changed the way we shop for everything, and shopping for a home is no different. While today’s real estate agents are still happy to comb through listings to help you find the right home, most buyers spend a lot of time scouring online listings in search of the perfect place. Here are four tips to help you make the most of your online searches.
- Use our online search tools. Our websitewww.abramsondesertrealestate.com has lots of great information on neighborhoods and up to date listings in an easy-to-use format.
- Investigate new areas. Even if you are searching near your current home, it is easy to expand your search online to discover new neighborhoods. Our website offers a map-search feature that you can use to follow along streets that you know or search near your place of employment. Looking at a map is much easier than punching in ZIP codes and hoping for a hit.
- Narrow the price range first. Most online search results will return an overwhelming number of houses – even in a tight market. The fastest way to shrink that list to a manageable size is to cut the list off slightly higher than your maximum price. You will also want to set a price minimum to cut anything from the list that is likely to be a major rehab, or have other problems that are putting it at the bottom of the price list.
- Contact your agent. If you find something that you like, you do not have to follow up with the agent that is listed for that home. Instead, contact The Abramson Team. We can make arrangements for you to see the home, and also help you search for others in the area that are similar.We’re here to help, so if you are ready to start looking for a new home, second home or considering putting your current home on the market give us a call and let us work for you. WE ARE NEVER TOO BUSY FOR ANY OF YOUR REFERRALS.Sincerely,Pamla and John Abramson