Be aware there are two terms used interchangably but must be defined for proper understanding.
Pre-qualified is a condition where you relay data to someone at a keyboard and a number is popped out that says, "Pre-approved for a gazillion dollars." No data is verified. Tax returns not submitted. Pay stub not sent in. Your SS# not collected. They are worthless.
A PRE-APPROVAl has more fabric. Unfortunealty, many banks issue a preapproval and do absolutely NOTHING to verify anything. They take your data, your SS#, your 1040 and sit on it. They may run your creadit report. Many banks do nothing until a week or two before closing and that creates real havoc. You agent can advsie you who these lenders are.
If your agent suggests a 'too big to fail, too big to govern, and too big to care if you are homeless' bank. this should cause the waving of big red flags.
A pre-Approval or proof of funds, is intended to be a document confirming your ability to purchase a home at a specific price point based on 'verified' data.
A pre-Approval will be a REQUIREMENT to purchase a home.
Many homes require the buyer have a pre-approval before they can VIEW the home.
Nearly all require a pre-approval to accompany any purchase offer.
Agents representing home sellers trust agents representing home buyers HAVE done their job and secured the pre-Approval from the buyer. When a agent has a history of failing in this responsibility, they will encounter technical difficulties in gaining access to some homes for sale.
A secondary benefit is to cablibrate your shopping price point. Your agent, and you, must understand the likelihood of success shopping at $600,000 with a $400,000 budget is signifcantly dimenished.
If you are serious about buying a home, having the right documentation will be understood to be important. Those who are not serious, are always looking for a means to circumvent the process that has proven to be efficeint and reliable. So, are you a serious buyer?
Best of success to you,
Annette Lawrence, Broker/Assoicate
Remax Relatec Group
Palm Harbor, FL