As the housing market is warming up in many areas, and multiple offers becoming more common, buyers who want an advantage in the bidding process will need more than just getting themselves pre-qualified, rather you will need to be pre-approved from a lender.
What is the difference?
Being pre-qualified is based on what you disclose to the loan officer or broker about your earnings, credit score and total assets, including what is available for a down payment. Being pre-qualified gives you a basic guidance on range of prices you may be able to afford.
Being pre-approved requires borrowers to provide documentation of their income and their assets and employment. The lender will pull your credit report and score while the borrower will provide the mortgage underwriter items such as W-2 wage statements, 1099s, recent pay stubs, current bank statements, and etc.
Remember that lenders treat pre approvals as an opinion of your ability to borrow and it not a guarantee to lend. Once a borrower has chosen a property, have an offer accepted by the seller, and then have the property appraised before you can expect a firm commitment from a lender.
When should I get pre approved?
Buyers should aim to obtain a pre approval letter from a lender within 30 to 60 days of the expected purchase date. Pre approval letter normally expire in 90 days or so. Within in those days, your income and bank statements will need to be updated between pre approval to the close of escrow.
For more information about getting pre approved, visit your bank or talk to a mortgage broker.
What is the difference?
Being pre-qualified is based on what you disclose to the loan officer or broker about your earnings, credit score and total assets, including what is available for a down payment. Being pre-qualified gives you a basic guidance on range of prices you may be able to afford.
Being pre-approved requires borrowers to provide documentation of their income and their assets and employment. The lender will pull your credit report and score while the borrower will provide the mortgage underwriter items such as W-2 wage statements, 1099s, recent pay stubs, current bank statements, and etc.
Remember that lenders treat pre approvals as an opinion of your ability to borrow and it not a guarantee to lend. Once a borrower has chosen a property, have an offer accepted by the seller, and then have the property appraised before you can expect a firm commitment from a lender.
When should I get pre approved?
Buyers should aim to obtain a pre approval letter from a lender within 30 to 60 days of the expected purchase date. Pre approval letter normally expire in 90 days or so. Within in those days, your income and bank statements will need to be updated between pre approval to the close of escrow.
For more information about getting pre approved, visit your bank or talk to a mortgage broker.
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