What's The Difference Between Pre Qualification and Pre Approval When Buying A Home?

When the time is right and you are getting ready to buy a new home, you'll be faced with the options of getting prequalified or preapproved for a home loan. Both prequalificaiton and preapproval are helpful steps in the beginning of the home buying process, and have to do with financing your home with a mortgage. Let's dive deeper into what specifically each one is, how they are similar and how they are different.

Interested in buying a house in Orange County? Chat about all things OC real estate with Balboa Realty: (877) 713-6902

Pre-qualification

Getting pre qualified for a home loan is often seen as the first step in the home buying process. You’ll start by self reporting your income, credit score, assets and debts to a financial lender and they will then review you information and present you with a letter explaining a general budget for the cost of your potential new home. This will safe you time and money because you will have an accurate estimated budget to work within. The last thing you would want to have happen is to find a dream home, and then realize it is actually out of your budget. Save yourself the heartbreak and get prequalified for a home mortgage first. 

Learn more about buying a house in Orange County. 

Pre-approval

To get pre-approved, you will also have to provide your income, assets, debts and a hard credit report. These must be official verified documents and cannot be self reported which is the main difference between pre-qualified and pre-approved. When you are shopping around for homes, having a pre-approved letter proves that you are a serious buyer ready to make the plunge. Sellers can feel confident that you are in it for real and have the funds to make it happen. When the market is competitive like the Orange County real estate market, getting pre-approved can help you stand out from the crowd and sellers are more likely to want to work with you. 

Want some real estate advice on buying a home in Orange County? Balboa Realty is here to help you through it all. Call: (877) 713-6902

Published on Friday, May 24, 2019