Pre-approval vs. pre-qualification; what's better?

Position your offer ahead of the pack with a pre-approval letter! With the housing market heating up in many areas, and multiple offers becoming more commonplace, buyers who want an advantage in the bidding process will need more than a prequalification, they need a preapproval.

The difference is significant.

• Prequalifying for a mortgage is based solely on what you disclose to the loan officer or broker about your earnings, credit score and total assets, including what is available for a down payment. It’s really just taking someone's work on what they report their financial status is.       
• Preapproval, by contrast, requires borrowers to provide documentation of their income and their assets.

Preapproval carries more weight and gives you bargaining power when negotiation a deal.  Borrowers should ask the lender to provide a good-faith estimate on closing costs and fees along with the preapproval.       

The preapproval       

• Timing is important. Buyers should aim for obtaining a preapproval letter from a lender within 30 to 60 days of the expected purchase date, as one's financial status can change.
• Your income and bank statements may also need to be updated if it has been a few months between preapproval and the signed contract for buying. 

Don't lose your dream property because you didn't do your homework.   Ask us today at Desertdreamhomes@gmail.com today for a sample pre-approval letter.