What’s the Deal w/ Pre-Qualification & Pre-Approval
What’s Pre-Qualification? What’s Pre-Approval
You may have heard the terms “pre-qualification” and “pre-approval,” used before, but are wondering what the difference is between them. In fact, these two terms mean very different things in the real estate world, but both can be useful tools in your home buying process.
A pre-qualification is very preliminary assessment completed by a lender based upon information supplied by the borrower. Most lenders do not need to pull your credit to issue a pre-qualification letter. Because no credit check or income verification is performed, a pre-qualification letter won’t get you very far in the marketplace. What it DOES do, however, is let you know how much money you can afford to borrow. Armed with this knowledge, you will be better equipped to get your home search off to the right start, because you will not waste time chasing after homes you ultimately cannot afford.
A pre-approval letter, on the other hand, is issued after the lender has run a credit check on the borrower and verifies his or her income and assets. Because of this, it is an important document that can help show sellers and their agents that you are a serious buyer who can actually afford to purchase the home. Because most contracts have a financing contingency, providing a seller with a pre-approval letter relieves some of the seller’s concern that you may be denied a loan.
When sellers are deciding between multiple offers, a strong pre-approval letter can sway the decision in the pre-approved buyer’s favor.
[su_note note_color=”#eeeeee”]If you want to discuss the pre-approval or pre-qualification process with one of the Midtown Condo Experts here at CityMax Realty, give us a call at 404-926-6027 today![/su_note]