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The Home Buying Process
Step 3 Of 6
Step 3: Get Pre-Qualified
Get Prequalified
Getting prequalified is like getting an estimate from a mortgage institution detailing how much of a loan you can likely afford. Prequalification is based on information you give the lender about your income, assets and liabilities. Keep in mind that this is only a guide of what a lender might require rather than an official approval.
... or get preapproved
Getting preapproved is another option, although it adds a few simple steps to the beginning of the loan process. Preapproval requires you to complete a loan application and provide all of your salary and credit information. The lender then checks your assets and preapproves your capability to get a loan.
When you find your dream home, you can present the sellers with your preapproved loan document. This shows the sellers that you are not only serious about buying their house, but you have also been preapproved for financing. It could make the difference between getting the house you want or watching another bidder step in with a preapproved loan and snatch that house away. Preapproval is good for 120 days and depends on the appropriateness of the property you want to purchase.
Getting Pre-Approved
When you find your dream home, you can present the seller with your pre-approved loan document, showing them that not only are you serious about buying their house, but you've already been pre-approved for financing.
It could make the difference between getting the house you want or watching some other bidder step in with a pre-approved loan and snatch that house away. Pre-approval is good for 120 days and depends on the appropriateness of the property you want to purchase. Fees, like credit reports may apply.
