Pre-Approval NOT Pre-qualification

Published by bmccord March 17th, 2008 in Finance, Mortgage. Tags: No Tags.

Once you begin thinking about buying a house the most important thing to is do is find out two things:

1. How much a Bank will lend you.

2. How much your payments will be (including taxes and insurance)

There is little point in going out looking at open houses etc if you don’t know whether you can afford them. Save yourself a lot of time and frustration by getting Pre Approved. This is NOT the same thing as Pre-Qualified.

Pre-approved means you have a written commitment from a chosen Lender stating that your personal financial data has been checked out and your loan is ready to go as soon as you have a contract on a suitable home. Now is the time to get out for some serious house hunting knowing exactly what you can afford.

Pre-qualification is next to useless. This simply means you have given some general information to a Lender who can “honestly” say that providing what you say is true you will be able to get a loan. Until your income, credit, down payment, etc has all been proven you are not really ready to start looking.