BUYER EMPOWERMENT UNIVERSITY FAQ's
What's the difference between Pre-Qualification and Pre-Approval?
Many buyers needing or wanting financing call their lender seeking information. In the process, they become pre-qualified based on the information provided on the phone. A pre-qualification gives a buyer a good idea of what they can afford, or more accurately, what loan amount they qualify for and it allows them to place offers on properties. Sometimes the lender will pull their credit to assess their situation, sometimes they do not.
In order to strengthen your offer, you should take it one step further, however, and ask to be pre-approved. When you become pre-approved, you actually apply for a loan. The lender checks credit, verifies employment, and often verifies that you have sufficient funds to close. Then once you find your dream home, just about the only thing left is the appraisal.
The reason savvy buyers obtain loan approval before shopping for a home is that it strengthens their negotiating position when they make an offer. All sellers want to sell their home to a pre-approved buyer. Pre-approval can also cut days, even weeks, off the closing process. And it can save the seller and the buyer from the unpleasant snags in financing that can occur and threaten a transaction from closing at the last minute.
If you don't have a bank or mortgage professional that you are working with, please email me at cinda@wvhometeam.com and I can forward the names of some local mortgage professionals.
