The Difference Between Pre-Qualified vs. Pre-Approved
There are many details to buying a home, and as a homebuyer, you can't be expected to remember them all. Pre-qualification sounds like the last step in the mortgage, yet it's only just the beginning. In fact, if you were to rely solely on the results from your pre-qualification it could cause some bigger problems down the road.
Though pre-qualification is important, you want to make sure that you are pre-approved before buying a home in Colorado. Here are a few details that can help you understand the distinction between these two steps.
Though pre-qualification is important, you want to make sure that you are pre-approved before buying a home in Colorado. Here are a few details that can help you understand the distinction between these two steps.
1st Step: Pre-Qualification
When you are pre-qualified, you have completed the initial step in the mortgage process. You will provide your financial information to the bank, including you debt, income, and assets. They will evaluate all of the information, and then the lender can give you an estimated mortgage amount that you could qualify for. Pre-qualification does not examine your credit report or take an extensive look at your ability to actually purchase a home. This step can be done over the phone or the internet, and it can be a fairly fast process. While this initial step allows you to discuss your goals with your lender, being pre-qualified only gives you an estimation of your approval. This estimate is not set in stone - which means that pre-qualification will not be as accurate as pre-approval.
2nd Step: Pre-Approval
This is the next step in creating a balanced mortgage plan. Pre-approval is much more in-depth and there will generally be an application fee attached to it. You will work with your lender to supply necessary documentation, and they will perform an extensive check on your financial background. Once you are pre-approved, your lender will be able to provide you with specific mortgage amounts and give you a better idea your interest rate. This information will make it much easier to shop for homes that will be in your price range.
Knowing the difference between these two steps is important when you are buying your home. If you find your dream home, but you are only pre-qualified for the cost of the home, you may find that are not able to finalize a loan for the same amount. financing is a huge part of the homebuying process, so getting it done ahead of time can play a huge role in finding your dream home in Colorado Springs.
Colorado Real Estate
Buying a home in Colorado is exciting, but can be full of unknowns. From learning about the best financing to finding the best real estate agent in Colorado Springs, you will have many choices to make along the way. My team and I want to provide you not only with information to help but also guide you through the entire process. Don't let the complexity scare you from enjoying a beautiful Colorado home! Call us today and let our team show you our passion for excellence.
Mike@BuyWithMike.com
Knowing the difference between these two steps is important when you are buying your home. If you find your dream home, but you are only pre-qualified for the cost of the home, you may find that are not able to finalize a loan for the same amount. financing is a huge part of the homebuying process, so getting it done ahead of time can play a huge role in finding your dream home in Colorado Springs.
Colorado Real Estate
Buying a home in Colorado is exciting, but can be full of unknowns. From learning about the best financing to finding the best real estate agent in Colorado Springs, you will have many choices to make along the way. My team and I want to provide you not only with information to help but also guide you through the entire process. Don't let the complexity scare you from enjoying a beautiful Colorado home! Call us today and let our team show you our passion for excellence.
Mike MacGuire
Colorado Springs Real Estate Agent
The MacGuire Team
6760 Corporate Dr
Ste 300
Colorado Springs, CO 80919
719-536-4324 or 719-660-6793
Mike@BuyWithMike.com
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