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Pre-qualified vs. pre-approved Mortgages—have you been wondering what the difference between them is?
Pre-qualification is the first step in the mortgage process, and it involves telling a mortgage company about your financial position over the phone, via the Internet, or face to face. This may include information about your income, debts, and assets.
The mortgage lender will evaluate the information provided by you, and tell you about the mortgage loan amount for which you are eligible. The lender will not analyze your credit report or do a detailed evaluation of your eligibility for a loan to purchase a home.
A pre-qualification process can be completed quickly, and it will give you an idea about the mortgage amount for which you can hope to be approved.
The next step is to be pre-approved for a loan to buy a house, and for this you will have to fill out an official mortgage application form.
You may be asked to pay a non-refundable application fee, and will have to provide the home mortgage company with documents needed to perform a detailed analysis of your financial background and credit rating.
After the assessment of your finances, you will receive conditional pre-approval in writing, and will know about the specific mortgage amount that you have been pre-approved for, as well as the approximate mortgage interest rate that will be applicable.
Once you are pre-approved for a mortgage, you can start looking for homes that are within your budget, and lenders will know that you are a serious buyer.
However, you cannot be sure that you will receive the mortgage home loan until the lender thoroughly investigates your finances, and appraises the home you want to buy. After this the lender will issue a loan commitment letter, which means that you have been approved for a loan.
To get free online mortgage quotes from the best mortgage lenders, please fill out the short form provided here. There is no expense or obligation involved, and your contact details will never be revealed to anyone without your consent.
Please feel free to send us an email if you need any advice about mortgage home loans. Our experienced counselors will help you to find the right answers!
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