Pre-Approval

Preapproval:

Why Get Pre-Approved For A Mortgage?

Getting pre-qualified helps you determine how much home you can afford, based on specific financial information you share with your lender. The lender does not verify this information, and consequently there is no guarantee you will qualify for the loan amount. Pre-qualification is an informal discussion between borrower and lender. The lender estimates the amount that you can borrow based solely on what you tell them about your income and assets. The lender does no verification and is not bound to make the loan when you’re ready to buy. In today’s market pre-qualifications are becoming more rare than they were several years ago.

Getting pre-approved requires that the lender verify your financial information, and does serve as a commitment to lend a specified amount based on that verified information. This gives you significant buying power with a seller who recognizes you will be approved for a loan. To a seller, a lender’s pre-approval letter is considerably stronger than a pre-qualification letter. If a seller knows your financing is secure, your offer is stronger. Pre-approval also gives you peace of mind as you shop for a home, knowing that you will qualify for the proper mortgage amount.

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