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BUYER


Preapproval vs. Prequalification

What's the difference? They sound the same, but they are quite different.

Pre-qualification

Getting pre-qualified is a simple process and a good place to start. It can be completed over the phone or online. You will need to make contact with a loan officer and they will ask you a series of questions about your income, current debts, employment and so forth. Based on that information, the loan officer will give you a range of values that you can probably afford.

Pre-approval

The process of getting pre-approved is much more involved that a pre-qualification. The loan officer will pull your credit report and do a detailed investigation of your personal financial situation including your debts and liabilities.

You will provide documentation for your income, and the loan officer will verify information that you provide. They will look at their loan programs to see what types would work best for you. They will let you know for sure what you can afford.

In summary, you get your loan process just about as far as you can without having found the home you are going to buy.

Why you want a pre-approval

First of all, it puts you in the best bargaining position with the seller. Sellers and their real estate agents will ask for a copy of your pre-approval letter with any offer you make on a home.

It makes sense, the seller wants to be sure that you can afford their home before they sign an agreement and take it off the market. If the home you want to buy has other offers, a strong pre-approval can be the deciding factor on what offer the seller will take.

Secondly, it saves you time in the long run and makes your closing process much smoother. You know for sure that you qualify for a particular loan program, so you can make plans based upon it with confidence that there will not be any last minute issues with qualifying for a loan.

When you find the home you want, there is not much to do except for getting an appraisal done.

How to get a pre-approval

Get in touch with a reputable loan officer, let them know that you plan to start looking for a home, and would like to get pre-approved. They will be happy to help you. If you're not sure who to contact about a mortgage, send us an email, we would be happy to pass along the names and numbers of some great loan officers.

We would love to help you get your financing in place and find a home. If you have any questions, please give us a call or send us an email. You can use our Seattle real estate search to look for homes and condos - including communities all over the Seattle metro area! And don't forget about the Auto Email Program!