As I said in an earlier blog article (you can find it here), the very first thing you should do when house hunting is get pre-qualified for a mortgage.
But the next step is getting pre-approved for a mortgage.
Most people don’t understand the difference.
It’s pretty simple: a pre qualification means the loan officer crunched the numbers, and based on what you told him or her, you should qualify for a mortgage.
Obviously, the variable here is whether or not you’re telling the truth.
Many people get nervous and “fudge the numbers” when talking to the bank. They overstate their income or understate their expenses.
This is a big mistake!
Not only could it get you in trouble, it almost guarantees you will have a nasty surprise later on in the process.
So, just like we were all taught as children, honesty is the best policy. Tell the truth about your income and expenses.
The next step beyond a pre-qualification is a pre-approval. This is when the loan officer will ask for official documentation to prove your income and expenses. They will need official documents like last year’s taxes, recent paystubs, etc.
Once they verify that all of your information is “legit,” then they will issue a pre-approval. A pre-approval is much official than a pre qualification.
In other words, everyone who is pre-approved is pre qualified, but not everyone who is pre-qualified is actually pre-approved.
It is better to be pre-approved—this means you are more likely to qualify for your mortgage to buy the home of your dreams!
To get started, check out the HomeBuyer quiz.
It’s a 16-question quiz that will help you figure out if you should buy a home. I tell all of my buyer clients to take this quiz before doing anything else. It takes less than 5 minutes.
As always, if you have any questions about the real estate market here in El Paso County, feel free to email me at firstname.lastname@example.org, or text me at (719) 393-3633.
Happy house hunting!