Many agents will not even give you the time of day if you have not at least been pre-qualified for a mortgage some will even want to see the letter from your lending institution that says they you have been pre-approved.
Calculating how much your mortgage will carry for helps you to determine how much mortgage you feel comfortable carrying based on your purchase price, down payment interest rates and amortization. What it will not tell you is how much a lender is willing to lend you.
In today’s hot market having the “pre-approved” letter from your bank or lending institution gives you a jump on a competing offer or offers from some one who still needs to get approved for a mortgage.
Would you be embarrassed if you went shopping at a local store and went to pay only to realize you left your wallet or credit card at home. Well looking for a home without getting “pre-approved” can be even more embarrassing.
Can you picture it? You found the house of your dreams you put in an offer based on what you thought you could afford based on your lenders pre-qualifying and it was accepted Now all you have to do is wait for the mortgage company to approve your application for the mortgage.
Just imagine how you might feel having to call your agent to say the mortgage company did not approve you. It does not matter to your lender of choice how you might feel because your documentation does not match the information you supplied or they found something in your credit history that you forgot to tell them about when you went for pre-qualifying.
Pre-Approval VS Pre-Qualified
- Pre-qualified …. your lender says you can get a mortgage of “X” amount based on the information you supplied.
- Pre-approval ….. your lender says you can get a mortgage of “X” amount based on what you have told them and on the information they collected while conducting their due diligence including a full credit check ….. subject to an appraisal of the property you purchase.