Mortgages 101 – Difference Between Prequalified and Preapproved
When you decide to purchase a property, whether it may be a single-family home or a condo, how are you going to pay for it? Chances are you will end up getting a mortgage for the property. Whether or not you decide to work with a real estate agent you need to know some mortgage terms. Are you prequalified or preapproved? Isn’t that the same thing? NO. Your first step in the mortgage application process for purchasing a home is getting yourself prequalified. A prequalification is exactly what it sounds like – you are receiving a pre-qualification from your loan officer. Typically, you will be asked about your job, salary, car payments, etc. If you are getting serious about purchasing your home you need to get preapproved. A preapproval verifies all the information about your job, salary, car payments that you provided. Your credit report is usually run at this point – this is to check if your credit is good enough to receive the loan you requested to purchase the property. During the preapproval process, your income is verified by reviewing paycheck stubs or a recent W-2. Now, do you go to a mortgage broker or a bank to get all “this mortgage stuff” figured out? In my opinion, I would highly recommend a mortgage broker. A mortgage broker works similarly to a real estate agent – they have your best interest in mind. They shop around and negotiate for you. If you don’t know of any mortgage brokers it’s always good to get a referral – I can always refer you to a fantastic broker that has years of experience.
So…What is the difference between being prequalified and preapproved? Preapproval is the process of verifying and approving your prequalification – simple as that. If you want to know more details of the actual process send me an email to firstname.lastname@example.org or post a comment on my page.