Don't Start House Hunting Until You Are PRE-APPROVED!

What is the difference between being pre-approved for a mortgage and pre-qualified? There is a significant difference between the two, and we are here to break that down for you!

A pre-approval is a letter from a lender stating how much they are willing to lend to you. Having a pre-approval is excellent for a buyer to get an idea of what they can afford in the housing market. You will need to provide documents like a bank statement and pay stubs to prove your income and the funds you are using to get a loan. A pre-approval will require a credit check.

After you have been pre-approved, you can take it a step further to get pre-qualified. Pre-qualification is a more in-depth process. The items that a lender will review in the pre-qualification process are:

1. Pay stubs
2. Two years' worth of W-2s
3. Two years' tax returns if you are self-employed
4. Two months' worth of bank statements
5. Explanations of any late payments or negative credit items and documentation of child support, alimony, or retirement income.

As you can see, these are two different processes that have different values in the eyes of a seller. If you are serious about writing your best competitive offer, talk with your lender about getting pre-qualified.

If you have any other questions about getting prepared to buy a house, contact one of our agents at Castle Rock Realty to get you on the path to homeownership.