Mortgage: Pre-Approved vs. Pre-qualified- Do you know the difference?

Hand holding a houseIS THERE A DIFFERENCE?

My local mortgage guru explained in a recent presentation that home buyers often mistakenly believe that if they’re pre-qualified for a mortgage, they have been pre-approved for a home loan. Unfortunately, that just isn’t true.

Mortgage pre-qualification only tells you how big a mortgage you will likely qualify under your current situation. Mortgage pre-approval looks at your total financial situation, so you only do that when you’ve found the perfect home.

Patrick Dennis of Bank of Little Rock says their pre-qualification application will indicate the mortgage amount you might qualify for. Pre-qualification can often be done over the phone or by email, and there’s usually no cost.

SO HOW DO I GET PRE-APPROVED?

When you find your dream home, that’s when you get approved for a home loan. Complete a mortgage application, then supply the lender with your information to review financial history and debt to income ratio. With pre-approval, you will know the exact loan amount, the interest rate you’ll be charged, and the deposit required.

Are you are ready to buy your own home, but not sure your credit will qualify or how much deposit you’ll need? I encourage you to reach out to my friend, Patrick Dennis, he’ll help you answer all those questions. He will also inform you of any additional steps required to qualify for a loan in the future. He insists, “Don’t try to fix your credit on your own. Sometimes what you think will fix it, actually makes it worse.”

Warning: Once you are pre-qualified or pre-approved, don’t buy a new car, furniture, or other pricey items on credit. Large transactions like that eliminate your mortgage approval. Everyone needs to find their own dream home. These are just a few tips to make your mortgage approval process smooth!

*Even though Patrick works for the Bank of Little Rock, he can help anyone, anywhere, so give him a call at 501 …  219 … 9100. Tell him you heard about him from Judy Best. I love when he owes me a favor!  How can I help you? Leave a comment …