Getting pre-qualified for a mortgage:
Getting pre-qualified for a mortgage is what most people are doing when they
think they are actually getting pre-approved. Getting pre-qualified
involves verbally providing your income and debt, which in turn tells you how
much of a loan a bank would give you. This is a good start in buying a property, but the actual
mortgage approval process has not started yet. It is in your best interest to
go one more step beyond this and to get pre-approved.
Getting pre-approved for a mortgage:
Getting pre-approved for a mortgage is something that will make you a much
stronger buyer when you are looking to buy a piece of property. Getting
pre-approved involves submitting all financial information to a
loan originator. This may include filling out an loan application form
and submitting such documents as, paycheck stubs, bank statements,
investment statements, two years of past tax forms and also having a credit
report run. This can be done at no cost or minimal cost to you. Once you have given the mortgage person your information and documents, they
will be able to move forward to help you. They will now be able to get you
pre-approved for a loan.
The advantages of being pre-approved for a mortgage:
Once you are pre-approved you are a much stronger buyer in the
market place. The approval process takes anywhere from a couple of
days to a couple of weeks depending on how quickly you get your information
and documents to the mortgage person. You will be sent a pre-approval
letter that you can give to your agent so they can submit it when
making an offer on a piece of property. Also, you may authorize your
mortgage officer to fax a copy directly to your agent to expedite this
process. Being pre-approved becomes
even more important if there is more than one offer on the
property. The pre-approved buyer increases their chances of having their
offer accepted which is an advantage to you.
After getting pre-approved:
Once you are pre-approved by a mortgage company, you still have the
option of shopping around to other mortgage companies, if you desire.
You are not locked into staying with the company that pre-approved you.
One caution to beware of when getting pre-approved, is
that sometimes a loan originator may
tell you that you are “pre-approved” or maybe even give you what they call a
“pre-approval letter” when really you are only pre-qualified. Many
people use these terms interchangeably, when in fact they have two
completely different definitions. We will
gladly help verify if you are in fact pre-approved.