The Advantages of Getting a Mortgage Pre-Approval vs Pre-Qualification

If you are planning to purchase a home soon, your first step should be to get Pre-Approved for your mortgage financing. 

A Pre-Approval, as opposed to a Pre-Qualification, means that the loan application has already been taken and that you are approved as a buyer up to a certain price range, so your loan will be subject only to the property meeting the lender's approval guidelines.  

This is more important than ever in our current housing marketplace because of the low inventory of available homes for sale and the likelihood of sellers receiving multiple offers on their homes.

Here's why Pre-Approved buyers have the advantage over those who are not Pre-Approved:

♦  If you make an offer on a home and then apply for a loan, you are at the lender's mercy, who is aware that you do not have time to shop around. When you make your loan application and get pre-approved prior to making an offer on a home, you have the luxury of shopping around to find the best mortgage terms for your situation.

♦  Pre-Approval saves time spent looking at houses you cannot afford.  Your home search can be streamlined because you will know exactly how much you can spend.  With a pre-approval, you will also receive information about the closing costs, and be more informed about your total up front costs.  This will be very helpful especially when considering homes that may need some repairs and upgrades.

♦  A Pre-Approval letter from a lender gives you an edge when multiple offers have been made on a house. Sellers perceive you as a stronger buyer because they are assured you can close the deal. Sellers may be debating between your offer and a higher offer from a buyer who hasn’t been pre-approved. Your status just might motivate them to be a little more flexible with your terms.

♦  Pre-Approved buyers can generally close escrow more quickly, since most of the work has already been done.  The bank has already agreed to finance your home purchase. Now, it’s just a matter of gathering up the information for any additional data the lender requires and having the home appraised. A quicker close is generally favored by sellers.

We work with many excellent lenders who can get you Pre-Approved, and would be happy to recommend high-quality local loan officers to you. 

Contact us today and tell us about your buying preferences and goals.  We can help you get going on your home buying journey with every possible advantage of success.