Most buyers contact a real estate professional prior to being pre-qualified or pre-approved. Getting pre-qualified allows you to know how much house you can afford based upon your credit, income, and assets. Once you are pre-qualified you can know how much your mortgage payments can be, the price range in which you can purchase a home, how much down payment will be necessary, approximate closing costs, and the types of loans that are available to you.
Pre-approval takes it one step further. The mortgage professional will now get your paycheck stubs, W-2's, retirement information, etc. If your credit has not already been checked then they will do so at this time. Lenders will review your financial circumstances including income, debts and assets to determine the loan amount for which you qualify. The lender will issue a letter indicating the amount you are qualified to borrow. Mortgage pre-approval gives you a couple of advantages. First, it lets you know on the front end how much money with which you have to work. Second, it signals to sellers that you are serious about an offer and that you can indeed qualify for the necessary mortgage to complete the purchase. If you make an offer on a house with multiple bids, being pre-approved can often give you an edge over other offers.
If you need a referal to a mortgage professional give me a call!
Rebecca Melancon
For information in SWLA area click my picture!
