The first thing most people think about when they start their journey to buy a home is how they plan on paying for it. Not too many people can make a cash offer on a home so securing financing is typically a major concern especially for those that are first time home buyers. Some frequent questions that may come up are: Do I need a down payment? How soon can I get approved? What kind of credit score do I need? What’s the difference between approved and qualified?
We can help you out along the way with all the questions you may have but what will be discussed here is the difference between approved and qualified, but we can always answer other questions at Family First Mortgage whenever you reach out.
What’s The Difference?
Although the terms sound similar and people often use switch them with one another although they are not the same thing in the mortgage industry. If you are planning to buy a home, you’ll want to figure out your financing whether it be with a private lender or an FHA loan. The first task at hand will be to get pre-qualified because it lets you know what kind of funds you might qualify for to buy a home. The main difference between the two is that the consumer is submitting information for qualification while getting pre-approved is based on information pulled by the bank.
It’s important to have a good idea of your finances when it comes to purchasing a home so you’ll want to take a look at your credit reports and bank statements as that is information that your lender will be considering when discussing your loan with you. If you are not sure if you will qualify for the amount you want or are thinking of a home tentatively, getting pre-qualified is a good place to start. Since you are sending the information to the bank, the lender will provide you with an estimate and it can be easily be done online.
The next step to buying a home will be to get pre-qualified. This process is a bit more involved and shoes that you are a bit more serious about purchasing home. The reason for this is that the bank will pull your financial information themselves to determine your pre-approval versus you simply submitting your information yourself. When you are submitting an application to get pre-approved, you will also need to submit any other documents requested by the lender so they can do a thorough review of your financial situation.
Buying a home is a big decision and making sure you are in the best possible situation to do so means you’ll have better chances at getting the home you want with a smooth home buying process. When you secure your pre-approval letter from your lender, you can shop with a bit more ease as well as give yourself a leg up in a competitive market.
Once you’ve found the house you want, you’ll still need to secure the loan by getting your loan documents submitted and sent to an underwriter and getting the home appraised and inspected before getting the keys to your new home!
Call Us Today!
Family First Mortgage can help explain the home buying process with ease and we’d love to answer any questions you have when it comes to getting approved so don’t hesitate to reach out today!