Real Estate Tips - Getting Pre-Approved
Getting pre-approval is an advantage for you as a buyer. It is one more item of credibility for you to
include when making an offer. No seller wants to have a deal fall through later because of financing
and have to go through the whole sales process again.
The article below discusses several good points relating to pre-approval and how it differs from pre-
qualification. Following these tips are one of the many ways to make the closing process go
smoother and be less stressful.
Advantages of Pre-Approval
By Michael McClure
The first step toward obtaining financing for a home purchase is to select a reputable, quality lender.
The next step in the process is for you to obtain a “pre-approval letter” from that lender. Before I get to
that, it is important to note that there is a significant difference between “pre-qualification” and “pre-
approval.” Most buyers don't understand that there is a difference, but the difference is dramatic and
not realizing this could have a significant impact on the outcome of your home buying efforts. Here is
a brief explanation of the two processes:
- “Pre-qualification” does not guarantee you a loan. It merely establishes how much you are capable
of paying for a house, based upon what you tell a lender. Most lenders will provide a pre-qualification
letter to almost literally anyone that calls them. Accordingly, sellers and listing agents view “pre-
qualification” letters with a healthy degree of skepticism. As one very experienced agent stated it
succinctly, “pre-qualification letters are not worth the paper they’re printed on”
- “Pre-approval,” on the other hand, is a much more exhaustive process in which a lender will inspect
your credit and financial situation in detail. This process guarantees you a specific loan amount. It
also determines the types of loans for which you may qualify, your interest rate, your monthly payment
Already pre-approved? Well start your search for your dream home.
Check out the local town write-ups for El Dorado Hills Real Estate, Folsom Real Estate,
Cameron Park Real Estate, or go straight to our MLS Home Search and call me for more
information about homes you like or sign-up for daily email updates with your search criteria.
Some of our resources on home mortgages and investing in real estate may prove to be helpful during the financial processes of buying and selling real estate.
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