Do you know the difference between being pre-qualifed and pre-approved?

Do you know the difference between pre-qualification and pre-approval?

I wanted to share this great information from my website on my blog to help anyone who has the wrong idea about being pre-qualified and pre-approved for a mortgage.

Don’t Go Shopping for a New Home Before You Know Exactly How Much You Can Spend! 

Pre-Qualification vs. Pre-Approval

Pre-qualification is not a mortgage approval but simply an estimate of what you can afford. The lender asks basic information regarding your income, monthly debts, credit history and assets, and then uses this information to calculate an estimated mortgage amount. Based on what you say, the lender has not committed to your loan, therefore you have not received guaranteed funds.

Pre-approval is a bona-fide loan decision based on the applicant’s credit report, verification of income, asset and debt information provided by the customer and information provided during the application. When a mortgage lender issues a pre-approval it means that they will fund the loan pending a satisfactory appraisal of property, a title report, and purchase contract.

When you get pre-approved for a mortgage, you are a stronger buyer with a greater chance of having your offer accepted. For example, if the seller receives multiple offers and the other applicants are not pre-approved, your application may look better to them as they do not have to wait for the other buyers to go through the approval process.

You might have an idea of the loan payment and mortgage you can afford. But will the bank feel otherwise? It’s always best to pre-qualify for a mortgage so you know exactly how much a financial institution would be willing to lend you. 

In the pre-qualification process, you will find out: 

Exactly how much home or land you can afford

– How much cash you will need for the down payment. 

– The minimum down payment, and advantages of higher down payments. 

Compare 15 year vs. 30 Year mortgage rates and payment

What the bank feels you can afford for a monthly payment

Are there advantages with an Adjustable Rate Mortgage?

 I hope this helps! Call me and we can help you pre-qualify!

Tami Rapaport

Coldwell Banker Residential

130 Dean Drive

Tenafly, NJ. 07670

Direct:  201-227-2045

Cell:     201–665-5558

Tami@TamiRapaport.com

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About tamirapaport

I have been a Tenafly Realtor for many years and continue to offer excellent service for my friends and clients. I have been fortunate to be the only realtor to achive Platinum Level Sales Award for 8 years in a row! (NJAR Circle of Excellence 2002-2009) and in 2008, I ranked #3 out of 3,900 Coldwell Banker agents throughout the entire state of New Jersey! I love my job and my committment shows. I am also a member of Coldwell Banker International President's Premier, the top 1% worldwide of the heighest sales ranking within the company. Awards are great recognition, but my clients will tell you I get the job done! I am multi-lingual and speak fluent Hebrew as well as English.
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