Preapproved Vs. Prequalified -Mortgage Lessons

When you begin shopping for a house, condominium or any type of property there are two very important things that you need to learn. There is a very big difference between preapproved and prequalified. Their difference makes a huge difference in how soon you can move, and how quickly you can close on the house you wish to buy, as well as how serious your offer will be seen by the sellers.

Prequlified is viewed as the better option for those who are serious about truly purchasing a house or other piece of property. Preapproved is also a good idea for those looking to purchase a house and just wish to know approximately how much they can reasonably expect to be approved for.

Preapproved is the process of talking to a mortgage broker and giving them some information about your finances. This includes, how much you make annually, what your car payments cost, what other credit related bills you have, and how many dependants you have. All of these numbers affect the amount of a mortgage you can be approved for. Typically, at this point, a mortgage broker will give you an amount of what you can comfortably afford to pay for a mortgage payment, as well as a maximum amount that you can afford overall. None of the information is verified, at the most you can receive a letter from the lender stating the maximum amounts you can afford, however this is never a guarantee that you can get approved based upon your down payment amount as well as your personal credit rating. If you want a guarantee, you need a prequalification.