Pre-approval vs. Pre-qualification
Why a pre-approval gives you the advantage
Even before financing a dream home, PRM will set you up to win. With a quick and accurate pre-approval, your offer will get to the top of the pile, giving you an advantage over other, unprepared buyers. Let’s break down pre-qualifications and pre-approvals, how they’re different, and what they can do for you.
Most lenders provide pre-qualification letters, which means they ask basic questions about income and credit along with monthly debts. However, a pre-qualification isn’t a deep dive into your finances; it’s simply a ballpark figure that can help you with their house hunt. It’s important to remember that being pre-qualified for a certain amount does not mean that you are approved for that amount.
Unlike pre-qualification, the pre-approval process for a home loan is a much deeper dive into your finances. In essence, it’s proof that you are both willing and capable of buying a home, and adds that extra assurance to the seller that the deal won’t fall through should they choose you.
In the pre-approval process we:
- Collect earnings history
- Verify credit report
- Examine assets
- Analyze current debt levels
- May contact employer
This in-depth understanding of your finances gives us an accurate dollar amount of what you are approved for, and a better idea of what your interest rate will be. Although not set in stone, pre-approvals are much more accurate than a pre-qualification.
Benefits of a Pre-approval:
- You know your real budget.
- You gain better negotiating power.
- We contact the listing agent on your behalf to reinforce the strength of our pre-approval letters.
- We can even provide pre-approvals tailored to a specific property.
It is our goal to set you up for success from the beginning and give you a pre-approval you can count on. If you have any questions about pre-approvals, or how you can get one, contact us today! We look forward to being your guide through your home buying journey.Credit Score, First-Time Homebuyer, home buyer, Home Financing, home mortgage, homebuyers, pre-approval, Pre-qualification