Getting Pre-Approved for your loan
Pre-Approval vs. Pre-Qualified
Pre-qualify simply means that certain financial data has been provided to a lender and based on the information provided, a buyer should be able to afford a home in a determined price range, but nothing has been verified as to the true credit-worthiness of the buyer. Pre-qualification takes only a few minutes and is the absolute minimum any realistic buyer should do, as it helps a buyer to avoid shopping for properties that are too expensive for their budget.
Becoming pre-approved for the purchase of a home is essential if you want to spend your time wisely. If you’re pre-approved for a mortgage loan, then you know exactly what price home you can buy. Pre-approval is different than pre-qualifying and the difference is important. Pre-approval means a buyer has gone through the credit and verification process of a mortgage lender, and the lender is supplying the buyer with creditability.
A pre-approval is not a lender's firm commitment on a loan, but it does allow you to enter into negotiations with the seller with confidence. A pre-approved buyer is still a valuable buyer to a home seller. It’s the best position a buyer can be in when negotiating a home purchase.In fact, it has almost become a requirement of the market. If you elect to hire a good buyer's agent, they will insist that you are pre-approved (usually by their lender of choice.)
As a component of the financing contingency of the sales contract, the buyer will enter a loan commitment date. For a pre-approved buyer, this date can be met with a complete loan approval and a commitment (of the funds) letter from the mortgage lender in a 2 - 3 week period. If no pre-approval exists, this time usually stretches out to between a month and 45 days.
Pre-approve vs. Pre-qualify / How much can I afford? / Mortgage Calculator
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