Buying a home is a massive commitment, therefore, it is important that you are well prepared when starting the mortgage application process. To help you get started, Pat Cannone, your local Schaumburg mortgage lender, has explained the difference between pre-qualification and pre-approval so you know where to start.
Getting pre-qualified for your home loan is the first step before pre-approved. It just gives you an overall view of your income, debts, and assets. This can help you understand where you are financially, and if you are capable of becoming a homeowner. However, pre-qualification does not provide much more information than that. It gives you a general idea, but that is just about all the details a pre-qualification provides.
The next, more in-depth step, is getting pre-approved. Here you will have to provide your lender all your financial documentation, including past and current bills, any debt you may have if you have filed for bankruptcy in the past, and your income. Your lender will then run a credit check, which will not be done during the pre-qualification process. Your credit score largely determines what mortgages in Schaumburg you qualify for, therefore, once you know your score you will have a better idea of what your options will be.
After they review all your paperwork, the lender will be able to tell you exactly how much you can borrow. Knowing this amount can help you analyze your affordability so you know exactly what price range to shop in. This can save you time when shopping the residential market because you can avoid viewing homes that are outside your budget.
Pre-approval also gives you more credibility when looking for homes, than a pre-qualification. If you are in the middle of a bidding war, a seller will be more likely to choose someone who is pre-approved over someone who is not. This is because it shows you are financially capable of owning a home. Having this credibility also means a seller might be willing to offer you a better deal.
Get Started Today!
For more information on the benefits of pre-approval versus pre-qualification, or to get started on your Schaumburg home loan application today, please contact Pat Cannone at 630-965-8138.