First Step: Get Pre-Qualified!
Getting pre-qualified with a lender is a good first step toward buying a home. It is a simple conversation with a lender so they can advise you on what you can afford based on your income/debt levels, down payment, employment history, perceived credit score, etc. A pre-qual does not require the lender to pull your credit score. It is an estimated of the amount you would qualify if you took the next step and actually applied for a home loan. Being pre-qualified provides you, your real estate agent, and a your lender a ball-park figure of what you would likely be able to afford in a home loan. Pre-qualification does not meant the you are approved for a loan. Pre-qualification helps in the home buying process but it is not as strong a being actually pre-approved for a loan.
Getting pre-approved for a home loan means that you have met with a lender, submitted all the required documents for a loan application (institution’s application, proof of income, assets, tax returns, credit information, underwriting from the lending institution, etc) and have been approved for a home loan. Pre-approval shows home sellers and real estate agents that you are a committed buyer. It show you exactly home much house you can afford and helps your chances of getting the home you want. The pre-approval process can take 30-90 days typically, longer in some instances.
Summary of the difference:
Pre-qualification - first step, less robust, based on estimates, doesn’t require your credit to be pulled, is not a sure thing, is not taken as seriously
Pre-Approval - is based on verified information, must complete an actual loan application, requires a credit check, must be underwritten, shows written conditional commitment, shows sellers/real estate agents that you are serious.
Lisa A. Baskette
NMLS ID #0000546265
First Volunteer Bank
2329 N. Main St.
LaFayette, GA 30728
Office Phone: (706)9 996-8800