Is It Better To Get Prequalified Or Preapproved When Buying A House
The process of getting a mortgage loan to buy a house can be complicated, especially for people who have never done this before. If you are new to this subject and are ready to buy a house, you will want to talk to a mortgage lender before going any further. Your lender can help you get pre-qualified and pre-approved for a loan, and here are several things to understand about these terms.
What is pre-qualification?
A lot of people think that getting pre-qualified and pre-approved are the same thing, but they are not. Getting pre-qualified is a very informal way of finding out if you can get a loan to buy a house. If you choose to contact a lender to get pre-qualified, you can expect the lender to ask you a lot of questions about your finances, income, and job, but you should not expect the lender to ask you to fill out an application or submit financial documents.
Pre-qualification is simply the first step to use to find out if there is a good chance you will qualify for a loan. If the lender pre-qualifies you, it does not mean you will definitely get a loan, but it does mean there is a good chance you will be able to.
What is a pre-approval?
The pre-approval process takes the pre-qualification process one step further. During the pre-approval process, the lender will ask you to fill out an application. The lender will also ask for financial documents, which may include tax returns, pay stubs, and saving's account statements. You will need to tell the lender about every asset you own and every debt you owe.
After the lender receives these documents and verifies them, the lender will be able to tell you if you are pre-approved. If you are pre-approved, you will have a great chance of qualifying for a loan when you choose a house to buy.
Which one should you get before you start looking at homes?
The real estate agent you choose to help you find a home for sale will probably encourage you to get pre-approved before you shop for a home. A pre-approval letter from a lender shows that you meet the requirements for a loan, and it will help you know how much you can afford to by a house for. If you have questions about this, contact an agency in your city, such as GRT VA LOAN .