Pre-Approved vs. Pre-Qualified
Don't Lose Out on a Dream Home
The first step in buying a home is to know how much money can be borrowed. This review is called a pre-qualification and it’s a simple review of income and expenses to identify the amount of a loan that can theoretically be approved. However, when it’s finally time to go out looking at prospective homes, it’s important to go beyond just getting pre-qualified and get pre-approved for a mortgage to assure that a dream home doesn’t get snatched up by another buyer.
In today’s fast-paced real estate market, home sellers are looking for assurance that people that submit a bid for their home will actually be approved for a loan. A pre-qualification letter does not provide that assurance; it does not provide an in-depth review of the prospective buyer’s credit history to assure that a lending institution will approve a loan. For that, a pre-approval review is necessary.
Taking that extra step to get pre-approved means filling out a loan application and having the lending company perform an extensive review of the applicant’s credit history. This pre-approval letter is then included with the bid on a home and the seller has a basis to decide whether to accept the offer or not. Think of it this way — a home seller gets two offers that are very close on price, but one is pre-approved for mortgage, and one is just pre-qualified. The pre-approved offer is the more obvious choice since the seller knows that the buyer can actually get a mortgage.
Anyone interested in help finding their dream home, can contact Angela Pohakuola Studer (RA) RS-79822, Coldwell Banker Pacific Properties, 4460 Kapolei Pkwy., Ste. 310, Kapolei, call 808-551-0900, email Angela.Pohakuola@cbPacific.com, or visit AngelaPohakuola.cbInTouch.com.
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