Mortgage Loans

Prequalification vs. Pre-approval

Now that you know what you want in a home, you need to find out what you can afford. There are two ways to go about this: prequalification or pre-approval for a loan. Either way, you can contact your agent about choosing a mortgage company.

Prequalification

Prequalification is the simpler of the two processes. It can even be done online or over the phone.  When you contact a mortgage company, they will ask you for some basic information about your finances, how much money you earn, your debt load, etc.  They will take this information and give you a rough estimate of how much of a loan you might qualify for.

Pre-approval

Pre-approval is more a more in-depth process. The lender will perform an extensive check of your finances including your credit rating, whether or not you're a first-time buyer, what your debt load is, how much money you have for a down payment, etc.  This figure will be a much more reliable estimate of what you can afford.

In most markets, pre-approved buyers are preferred over those that are merely pre-qualified.  Being pre-approved lets the seller know you have gone through an extensive financial background check and there should be no unexpected obstacles to you buying their home.

Glenn Kavanagh Senior Mortgage Consultant New American Mortgage Direct: 828-377-0220 Cell: 828-279-0465 Fax: 828-393-0843 Email: glenn.kavagagh@newamerican.com www.applywithglenn.com LIC#: I-151184    NMLS ID: 111923

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