Getting Pre Qualified
- You can improve your purchasing power when looking for a home by making sure you are prequalified or pre-approved by a mortgage lender.
- A mortgage lender will evaluate a potential homebuyer's credit report plus earnings, savings and debt information to get an estimate of the mortgage amount the borrower would qualify for. This is based on documentation the borrower has in hand, or what the borrower tells the lender. The review can take as little as a few hours or as long as a few days.
- Prequalification is usually free.
Getting Pre Approved
- This process goes a step further than prequalifying. Pre-approval means the lender has contacted the borrower's employer, bank and other places to verify all claims of earnings and assets. In return, the borrower receives a letter stating that he has mortgage approval for a certain amount.
- Since you already qualify for financing, pre-approval can speed up and improve your chances of reaching an agreement on the purchase price with the seller.
- The only cost for pre-approval may be the lender's cost of obtaining your credit report and/or application fees.
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Banks
Mortgage Brokers
Glossary of Terms
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