With a mortgage pre-approval letter in hand, know your buying power before you even look at your first potential new home.
If you are ready to start the homebuying process, you have probably already heard about getting pre-qualified or pre-approved for a mortgage first. In fact, most real estate agents will want a pre-qualification or pre-approval letter before they start showing you homes.
There are several advantages of getting pre-qualified or pre-approved before you start your home search.
- Focus your search
- Know your options
- Move forward confidently
- Show sellers you are serious
What’s the difference between a mortgage pre-qualification and mortgage pre-approval?
A pre-qualification is the first step in the process. When you pre-qualify for a mortgage, you are getting an estimate of how much you can borrow, based on information you provide along with a credit check. At this stage, you will learn about different mortgage loans, look at loan amounts, interest rates, and monthly payments that fit your budget.
A pre-approval takes the pre qualification to the next stage by verifying the information you provided. You will be asked to provide income and asset documentation that will be reviewed to determine loan eligibility. A mortgage pre-approval is as close you can get to a full approval without having a property under contract.
- Pre-Qualify
- Ready to make an offer
- Provide basic information
- Provide financial documents and credit check
- Pre-Approval
- Ready to make an offer
- Provide basic information
- Provide financial documents and credit check
You may find that you qualify for more than you are wanting to spend. It’s a good idea to start with your monthly budget and then convert this to a home price that fits.Â
How long does it take?
Getting a mortgage pre-qualification is a quick process and can be done online, with results typically within an hour. A mortgage pre-approval will take a little longer as you will need to provide your income and asset documents to be reviewed. These documents can be uploaded directly into the application portal.
How long is a pre-qualification or pre-approval letter good for?
A pre-qualification letter doesn’t have an expiration date but it’s a good idea to have it updated if it’s over 30 days old. A pre-approval letter is generally good for 90 days as the information and supporting docs have already been pre-underwritten.
How long is a pre-qualification or pre-approval letter good for?
A pre-qualification letter doesn’t have an expiration date but it’s a good idea to have it updated if it’s over 30 days old. A pre-approval letter is generally good for 90 days as the information and supporting docs have already been pre-underwritten.
Other Loan Types
Possibility starts here. Get approved for your mortgage
If you are ready to start the homebuying process, you have probably already heard about getting pre-qualified or pre-approved for a mortgage first. In fact, most real estate agents will want a pre-qualification or pre-approval letter before they start showing you homes.
Let's Find a Loan That's Right For You
Whether you are buying a new home, getting cash from your home’s equity, seeking a more affordable payment, or want to pay off your home loan sooner, our mortgage professionals explain your options simply and clearly — and offer you competitive rates and terms to help you save.
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The key to our success has been a combination of consistently offering the lowest possible rates and above all providing outstanding customer service. We take pride in treating our clients with honesty and integrity.
Frequently Asked Questions
A major benefit to getting prequalified is that it provides you with a realistic budget as you search for your future home.
In the current real estate market, prequalification is essential, especially for first-time buyers. In a multiple offer scenario, buyers without a letter of prequalification are often not taken seriously.
For the right borrower, an FHA loan can be the perfect mix of accessibility, affordability and flexibility. Because they are insured by the Federal Housing Administration, FHA loans generally have lower down payments, lower closing costs and lower credit requirements than conventional loans.
Buying your first home can seem challenging. Keep in mind that patience and preparation are vital in navigating the home loan process successfully. Check out top tips for first-time homebuyers from our team of mortgage lenders.
For some homeowners, refinancing their home loan makes sense, even in a rising interest rate environment. Others choose a mortgage refinance to accelerate their timetable to pay off their mortgage, or to lock in interest rates.
You'll need to take several things into account when determining how much you can comfortably afford. Consider how much you make, your monthly expenses, how much money you have saved, how much you can put towards a down payment, current interest rates and current home values.
Your credit score plays an important role in determining whether or not you qualify for a loan, as well as the type of loan you may qualify for and the interest rate. Lenders use your credit score to determine risk. While higher credit scores usually mean better rates, you may still qualify for a mortgage loan even if your score is less than perfect.
Before you apply for a mortgage, check your credit report and make sure it is accurate. If you find any issues, take care of them immediately, as this can take a while. Contact the credit bureaus and provide any information they require so you can clean up your report and improve your credit score. Make sure to pay all of your bills on time as well.