Buying Real Estate: Understanding the Difference Between Mortgage Pre-Qualification & Pre-Approval

As a real estate team, we realize that buying real estate can be equally exciting and overwhelming, especially where finances are concerned. As your real estate agents, we highly recommend doing a little research to understand how mortgage pre-qualification and pre-approval differ before you start looking at homes.

Mortgage Pre-Qualification

While buying real estate, receiving a mortgage pre-qualification is a good first step. This process is usually pretty straightforward and involves determining how much house you can afford after considering factors like your down payment, credit score, debt-to-income ratio, and more.

Although getting pre-qualified can give you a better feel for where you stand, keep in mind that it won’t get you very far in terms of the actual buying process. Most sellers want you to be pre-approved for a mortgage, and not just pre-qualified, before you put in an offer.

Mortgage Pre-Approval

Compared to a pre-qualification, a pre-approval is a written commitment from a mortgage lender or a bank saying that they will conditionally offer you financing after you find a home. However, gaining pre-approval from a lending institution is often much more time-consuming than the pre-approval process. In many cases, you will have to fill out a loan application and supply verified proof of your assets, employment, and income.

When it comes to buying real estate, it’s always a good idea to get pre-approved and then move forward with the pre-approval process before you start looking at homes. If you’d like to know more, reach out to us, Hawkins/Ryerse Real Estate Group, today.