Should You Be Pre-Qualified or Pre-Approved for a Mortgage?
Whats the difference between being Pre-Qualified or being Pre-Approved. When you are considering buying a home in today’s market it
is important for You, the Seller and your Real Estate Agent to know that you have been pre-qualified by a lender and are pre-approved for a mortgage.
Of course the benefits to you are tremendous in todays market conditions where homes are going under contract in a few days of coming onto the market, often with multiple offers being presented to the Seller. Buyers who have been through the financial aspects with a lender are in a good position should they find the home of their dreams.
Pre-qualified vs Pre-Approved
Pre-Qualification is the process you would want to follow in the initial stages of considering buying a home. This process allows you to find out what sort of Mortgage you would qualify for and if your credit score and debt to income ratio were in good order.
The lender will ask for your income, the amount of debt you have and the assets you own. They will take a look at the big financial picture and give you the size of the mortgage you could qualify for. Of course, the bank would need to investigate further before approving a mortgage, but this is a great place to begin should you need to know how much home you can afford to buy and what your financial requirements would be.
Pre-Approval means that the lender has taken into account your income, assets and liabilities, they have looked at your creditworthiness and they have made a decision about granting you a mortgage. The Pre-Approval Letter confirms that the lender will give you a mortgage provided nothing untoward happens or arises prior to your home purchase. The bank does reserve the right to withdraw from the loan should your credit score or financial aspects change for the worse or should the asset be destroyed or damaged in any way. It is very important to be Pre-approved for a mortgage. Most Real Estate Agents will not take you out to view properties without knowing if you are serious, pre-qualified and able to purchase a home. Its important for you to know your financial commitments and to be comfortable with the home buying process. If you have not been in touch with a lender and you are looking for some recommendations, I am able to send you a list of lenders you could interview in order to take the next step.
How Much Home Can You Afford to Buy?
Even though you qualify for a mortgage and you have the opportunity to purchase a home for an amount pre-determined by the lender, it is a good idea to think very carefully about the figure the lender gives you. You may be purchasing a wonderful asset however you have to consider the financial aspect on your pocket regarding maintenance and upkeep of a home, possibly a Home Owners Association Levy, your utility bills and service costs and of course property taxes too. Be sure that you do your “homework” properly in order to feel secure in your financial commitment to owning a home.
Choosing a Realtor to Work With You
When purchasing a home, you want to work with an experienced real estate agent, someone who knows how to look after your best interests at all times. Someone who works for you. Buying a home is a probably the biggest investment you will ever make and it’s not something you want to do without great representation. Generally, you do not pay any fees for representation, so find the right realtor to be on your side in a real estate transaction.
How to Chose a Realtor
- Interview a few real estate agents and see who you can connect with
- Ask for contactable references
- How long has the agent been in business
- Are they part of a team or are they single agents?
- Do they return their calls and who will be responsible for your transaction
- Do they have a current and up to date website
- What are their social media platforms like and are they the kind of people you want to be working with
At the end of the day find an agent that you like and trust because that person will be working with you for a long time and assisting you with major decisions.
Michael and Sara Gaddy have many years of experience. They have worked in all aspects of real estate. Your home purchase or sale is their priority. If you are considering purchasing or selling a home, you are in good hands with The Gaddy Group.
Contact Michael Gaddy on 704-975-4651 or email Michael today if you would like a list of lenders in order to get you Pre-Qualified and ultimately Pre-Approved for a Mortgage.
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