Why should you Get Pre Approved for a Mortgage?
When preparing to purchase a home, you will hear about two ways of estimating your borrowing power: pre-qualification and pre-approval.
Just remember, they are not the same thing!
If you are in the early stages of the home-buying process, getting pre-qualified by a lender gives you a good idea of what you can borrow. You simply provide income, debt, and down payment figures and the lender, in turn, provides you with an estimate of how much house you can afford. This is often done quickly, over the phone, and you have no obligation to use that lender to get a mortgage.
Pre-approval is Key
The Pre-approval process is much more involved, and will provide you with a specific dollar amount that you can afford. Most real estate agents will tell you that getting pre-approved is key to getting the home you want. Lenders and sellers will know you are serious about buying when it's time to make an offer. And in hot real estate markets, a buyer may need to act fast; if the competing buyer has a pre-approval in hand and you don't, they win!
Pre-approval is quick and relatively painless. Usually you can get pre-approved within 24 hours with the necessary income verification and supporting paperwork on hand; online sites can pre-approve you immediately, but you'll have to provide the verification to a lender eventually. And, as with pre-qualification,
you are under no obligation to use that lender for the loan .