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The Important Difference Between Pre-Qualified and Pre-Approved

When it comes to Tacoma home loans, you may be wondering, what is the difference between getting pre-approved and pre-qualified. While both have to do with your qualifications to get approved for a mortgage, they mean two very different things.

It is important for you to be aware of this distinction as you begin contemplating the purchase of a home, as this can have a large impact on the process you go through.

At Primary Residential Mortgage, Inc. we are here to make sure all our clients succeed in their goal of homeownership. We understand that the mortgage process can seem intimidating and confusing at times, especially when it comes to getting approved for the loan you need to purchase the home of your dreams.

We also understand the impact that preparation and information can have on the process, which is why we take the time to educate our clients on the process and all relevant aspects they may encounter along the way, which includes the difference between pre-qualifying for a mortgage and being pre-approved for one.

We will start with pre-qualification because that is the typical first step of the mortgage process in a majority of cases. Getting pre-qualified is usually the easiest part of the entire process, and can even be done online to save time. In order to be pre-qualified, you will need to submit your financial information – debts, income and assets – which will be evaluated for you and a decision made. Your credit is not analyzed at this point in the process.

Once you have been pre-qualified for your mortgage loan, you will have more information to work with as you begin consulting with your mortgage broker about the best options available to you.

A pre-qualification does not mean you will be approved for your loan when you apply.

From here, the next step is to get pre-approved. Getting pre-approved is a much lengthier process as it involves a deeper look into your finances and a full analysis of your credit score and financial background. This step will involve you filling out a complete mortgage application and your lender running a credit check.

Because this process is so much more extensive than the previous process of getting pre-qualified, getting a pre-approval is the next best thing to getting approved for your loan. While a pre-approval is still not a guarantee of your loan, it will give you much more to work with in regards to the price range of homes you should be searching in and what interest rate you will be charged on your loan.

This information will help you tremendously as you begin your search for the perfect home and will make sure you are not left devastated when you are not approved for the loan you need.

If you are interested in more information about Tacoma home loans or would like to get pre-approved for your mortgage so you can start house hunting today, give us a call at (253) 448-8296 to set up your consultation!

 

Source: http://www.investopedia.com/articles/basics/07/prequalified-approved.asp?lgl=myfinance-layout-no-ads