Prequalify or Preapprove. What’s the difference?

May 19, 2015

Before you start searching for a new home in Wisconsin, you should have a good idea what you can afford and have a number in your head that you feel comfortable paying each month, regardless of what the bank says.

You may have heard of pre-approval or pre-qualification. But what’s the difference?

Pre-qualification
Pre-qualification is used at the early staging of a home search and gives a basic idea of how much you can afford. Sit down with a mortgage lender and provide the financial information required to get “pre-qualified”.

Pre-approval
Pre-approval is much more advanced and detailed. A mortgage loan officer goes through an entire evaluation process in which paperwork you have submitted, such as paystubs and tax returns, are verified.  In the end, you will be given a letter stating a specific amount you have been “pre-approved” to borrow.

 

Why get pre-approval?

You’ll add weight to your offer to purchase

Shows you are a serious buyer

Loan may be processed faster

 

Pre-approval is not the final step in obtaining a mortgage but it gives both you and the home seller a good picture of the financial potential to purchase.   Thank you for reading the First Weber Wisconsin real estate & Wisconsin living blog to learn about the difference between pre-qualification and pre-approval.  If you’re ready to jump in and search for a home in Wisconsin, please search firstweber.com

First Weber sells real estate throughout Wisconsin: Metro Milwaukee and Southeastern WI, South Central Wisconsin/Greater Madison, Southwest Wisconsin, Central Wisconsin, Northeast Wisconsin and Wisconsin’s great Northwoods. You can start searching for Wisconsin real estate and Wisconsin real estate agents at firstweber.com

photo credit photo credit http://www.flickr.com/photos/nikcname/4893848354/

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