CHARLOTTE – Did you know there is a difference in getting pre-qualified and getting pre-approved for a residential mortgage? In this market, it is absolutely critical to ensure your financing is a full pre-approval and not just a pre-qualification.
A pre-qualification is based off a quick, informal conversation with a lender, or by completing a brief online application. This information is solely based off the information given without looking at supplementing documents. This type of “qualification,” leaves room for errors, and the question by sellers of: are they truly approved for financing? In addition, if one is to put non-refundable money into a transaction with only a pre-qualification, they are risking that money could be lost, if the documents do not match the informal conversation.
In contrast, a pre-approval includes one key step to the process: Documents! A pre-approval is similar initially: having a conversation, completing an online application, but then providing those critical documents. Documentation needed depends on your specific wants, needs, and circumstances. With a pre-approval, your lender will use the documents/application provided and determine a firm amount of money that they will provide. To take this a step further, a pre-approval shows real estate agents and sellers that you have financing fully in order, giving them the confidence needed to accept your offer. Many agents and/or sellers will not accept any offers without a full pre-approval.
Navigating this market can seem daunting, but with expert advice and preparation it can be made simple and efficient! Look forward to addressing “how to stand out in a seller’s market,” next week!
As always, feel free to contact me for any questions related to all thing’s residential mortgages (704) 430-6138 firstname.lastname@example.org