When considering a move, buyers tend to seek out information regarding their finances. Many of them tend to speak to a lender with the goal of obtaining a pre-approval. While this is a great first step, depending on how fast you want to move, there are a few things to consider when beginning the process. Knowing the difference between a pre-approval and prequalification is a great first step when preparing to buy a home.


Prequalification

  • A conversation, a skim of checkboxes, or run credit.
  • “Based on what you’ve told me you can afford a $300k home.”
  • After market crash is not a solid estimate of what the buyer may be able to afford.

Pre-approval

  • A review of bank statements, applications, and other official documents.
  • “According to a lender review of credit and bank documents you can afford a home within this range: $300k – $400k.”
  • Can be done in 1-2 days with a much greater chance of success.

Do you have more questions? Feel free to contact me to discuss you financial future when purchasing a home!