Great question! Seek Pre-Approval...
What's the difference between Pre-Qualification and Pre-Approval?
Pre-Qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment, etc. All of these factors will then be analyzed to determine your loan eligibility.
Pre-Approval (better) is written documentation that shows you have the support of a lender who is willing to finance you. It means our underwriter has reviewed your loan application. Based on your income, debt ratio and savings, the underwriter provides the dollar amount you are eligible to borrow. Now you can shop around for houses that fit into that loan amount category.
Here is the nice thing about being Pre-Approved: It gives you the advantage to shop as a cash buyer! With a Pre-Approval in hand, you now have the power to negotiate. The seller will take your offer much more seriously knowing you are already approved by a lender. Pre-Approval can also shorten the time it takes to close, making even a lower bid more attractive to sellers who are seeking to move quickly.
Good luck on your new home purchase!
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required), HARP 2.0 - No Appraisal Required for Refinance for Underwater Home Values, HomePath, Investor Friendly (10 financed properties), VA, VA Refinance loans (NO appraisal required on IRRRL loans), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!