Pre-Qualification vs. Pre-Approval
So, what's the difference?
Pre-qualification is not a loan commitment from a lending institution; it is only a loan agent’s opinion that you will be able to obtain financing. Virtually anyone can achieve pre-qualification status.
Pre-approval, on the other hand, signifies that the application has been taken through a more rigorous procedure.
One sure way to reduce stress and be in a better position to have an offer accepted by the seller during the process of home buying is to seek pre-approval. Buyers who are pre-approved are taken more seriously than their pre-qualified counterparts.
In this tight market, sellers want to know that a buyer that is putting an offer on their home will be able to close the deal. Many homes are getting multiple offers, so it is important to have a pre-approval if you at least want a chance at winning the home.
A serious buyer should be ready with a pre-approval so that they are able to submit an offer on a property that they find and love.
Pre-approved buyers enjoy these main benefits:
1. Pre-approval saves time spent driving around and going to see houses that you can’t afford.
2. Having a pre-approval letter from a lender gives you an edge when multiple offers have been made on a house.
3. Pre-approved buyers can generally close escrow more quickly. Once you submit your credit package, most of the legwork has already been done.
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