The Loan Application
Pre-Qualification VS Pre-Approval
If you're starting to search for properties you may come across something that is called a pre-qualification, but you may instead see a pre-approval (or neither of the two, of course). What's the difference between them? And where can you get them? Once you have calculated how much to borrow based on the purchase price, your deposit, and your income then you will want to learn more about pre-qualifications and pre-approvals, read on.
What is a pre-approval?
A pre-approval is one of the more straightforward parts of a mortgage application. Simple and developed to save you time, a pre-approval is able to give an idea of your chances of getting an offer accepted if you have chosen a house and want to move forward with a purchase.
The person offering the pre-approval (a bank or lender) will need your social security number, to run your credit score and to evaluate your basic finances. This will show both them and you how likely you are to be able to afford the loan that you are hoping to receive.
What is a pre-qualification?
A pre-qualification is very similar to a pre-approval, as in they both provide you with an accurate idea of how likely you are to have an offer accepted, but there is a difference. Pre-approvals need access to the above information from the offset, whereas pre-qualifications don't.
For this reason, they're not as accurate as their counterparts, but they can still give you a good idea of what your chances are.
What are their benefits?
It's obvious what the main benefit of both pre-qualifications and pre-approvals are. They can let you see how likely you are to have your offer accepted - and even though you could just make an offer and wait to see if you get accepted or not, pre-qualifications and pre-approvals will give you access to this information in little to no time at all.
You can make another offer and test it if your first isn't likely to be accepted (or if you want to make an offer that's a bit cheaper if you have a very high chance). They can only benefit you and there should be no issues or costs that come with using them, either.
Where can I get one of these?
If you're hoping to be able to use the benefits of either a pre-qualification or pre-approval, then you may be disappointed to find out that not every lender will offer these as standard. Some may offer one or the other, but many lenders offer neither.
If you're starting to search for properties you may come across something that is called a pre-qualification, but you may instead see a pre-approval (or neither of the two, of course). What's the difference between them? And where can you get them? Once you have calculated how much to borrow based on the purchase price, your deposit, and your income then you will want to learn more about pre-qualifications and pre-approvals, read on.
What is a pre-approval?
A pre-approval is one of the more straightforward parts of a mortgage application. Simple and developed to save you time, a pre-approval is able to give an idea of your chances of getting an offer accepted if you have chosen a house and want to move forward with a purchase.
The person offering the pre-approval (a bank or lender) will need your social security number, to run your credit score and to evaluate your basic finances. This will show both them and you how likely you are to be able to afford the loan that you are hoping to receive.
What is a pre-qualification?
A pre-qualification is very similar to a pre-approval, as in they both provide you with an accurate idea of how likely you are to have an offer accepted, but there is a difference. Pre-approvals need access to the above information from the offset, whereas pre-qualifications don't.
For this reason, they're not as accurate as their counterparts, but they can still give you a good idea of what your chances are.
What are their benefits?
It's obvious what the main benefit of both pre-qualifications and pre-approvals are. They can let you see how likely you are to have your offer accepted - and even though you could just make an offer and wait to see if you get accepted or not, pre-qualifications and pre-approvals will give you access to this information in little to no time at all.
You can make another offer and test it if your first isn't likely to be accepted (or if you want to make an offer that's a bit cheaper if you have a very high chance). They can only benefit you and there should be no issues or costs that come with using them, either.
Where can I get one of these?
If you're hoping to be able to use the benefits of either a pre-qualification or pre-approval, then you may be disappointed to find out that not every lender will offer these as standard. Some may offer one or the other, but many lenders offer neither.