When buying a new home, most people require a home loan, but many prospective buyers don’t realize the difference between pre-qualification and pre-approval (and the benefits of the latter!)
Pre-qualification involves a cursory look at you and your financial position. Pre-qualification for a mortgage means you meet the minimum criteria to obtain a loan after discussing your income, assets and credit. In other words, you’re a candidate for a loan, but this does not guarantee approval. That’s the key.
Pre-approval entails a more comprehensive evaluation of an individual’s income, credit report and assets. The mortgage loan agent will run a credit check, while assets and income are verified. If everything is in order, the prospective buyer will receive a pre-approval. It is not a guarantee but it gives the individual a much, much higher chance of actually securing a loan.
Getting pre-approved for a mortgage can place you in a good position when it comes to negotiations, especially if there are multiple people interested in buying a particular property. Pre-approval will give you an advantage over a potential buyer who’s only pre-qualified (or worse, hasn’t event started the process to get a home mortgage loan.
If you’re seeking to sell your home in a prompt manner, turn to Tammy Calhoun at Century 21 Hometown, serving all of Ventura County, California and beyond. Call Tammy Calhoun today at 805.794.7455 or stop by the contact form.