What’s the difference between mortgage prequalification and mortgage preapproval?
If you’re thinking about buying a new home it’s important you understand the difference between mortgage prequalification and mortgage preapproval.
Mortgage Prequalification: When you meet with a mortgage specialist to prequalify for a home, the lender rarely pulls a credit report. The prequalification is an estimate of how much of a mortgage you can afford based on your income, and finances. They will figure out your debt-to-income ratio and recommend how much you can afford to pay for a house. The goal of prequalification is to give you an idea of the price range you should look at.
Mortgage Preapproval: When you meet with a mortgage specialist to get preapproved for a mortgage, the lender will require all of your documents such as, tax returns, proof of employment, and bank statements. They will also calculate your debt-to-income ratio, and look at your credit report.
Preapproval carries a lot of weight when it comes time to purchase your new home. A seller is more eager to work with a buyer who has been preapproved, rather than one who has only been prequalified.
Contact the mortgage specialists at Midland Mortgage Corp. for your next mortgage loan. Call 803.765.1680 or toll-free 800.854.9484 today.