Learn the Lingo:
HOME FINANCING OPTIONS
Get pre-approved for bargaining power!
WHAT’S WHAT?
Pre-qualification vs. Pre-Approval
Before beginning your house hunt, it’s a good idea to get pre-qualified or pre-approved for a mortgage. Doing so will give you an idea how much you can afford to spend so you won’t waste your time looking at houses that are out of your price range. Keep in mind, though, that pre-qualifications and pre-approvals are two very different things:
• Getting PRE-QUALIFIED simply means that a lender has provided you with an estimate of the mortgage amount you will likely qualify for. Some lender websites only give you an estimate of fees, not an actual pre-qualification amount. If you choose to purchase a home, you will still have to go through the actual mortgage application process at that time.
• Getting PRE-APPROVED requires you to complete an application and provide a lender with paperwork so they can verify your income, credit, etc. If that lender does decide to pre-approve you for a mortgage, it essentially means you are guaranteed to get a loan up to a specified amount (assuming no major financial changes occur) for a limited period of time.
