Knowing your buying power is a huge advantage in the offer and negotiation process. Many properties are now seeing multiple offers and many sellers require proof of funds, pre-qualification or pre-approval.
It is important to know the difference. When it comes to securing financing for your future home, these terms are far from interchangeable.
To be pre-qualified, you simply inform a lender of your credit status, income, assets and existing debt. Based on that information, a lender will provide an estimate of the type of financing they will provide. However, because this is based primarily on your word alone, this does not mean as much to a potential seller. In addition the lender is under no requirement to honor the estimate they provided.
To be pre-approved, you provide a potential lender with the same information as you would to be pre-qualified. The lender verifies this information before providing an estimate of how much financing they will provide. The pre-approval process may require a fee, but, because your financing has been verified, it will make a difference when you make an offer.
Our partnership with Prosperity Home Mortgage provides you with a wide range of home financing programs and products including conventional conforming, FHA and VA loans, larger loan amounts, investment property financing and renovation loans. We will be with you during every step of your home finance process. We would be happy to introduce you to one of our loan officers.