When you are ready to purchase a property, one of the best places to start is to speak with a lender prior to looking at real estate. On top of that, it is better to seek out a lender who can underwrite-pre approve you with a commitment to lend rather than a lender who can (or is only willing to) pre-qualify you.
Therefore, is it valuable to understand the difference between getting pre-qualified and getting underwritten pre-approved. Below are the characteristics of each.
- It generally only takes a phone call in which you describe your financial picture, so it happens quickly. You also may be able to do it online and speak to no one.
- You can get a rough estimate on the mortgage amount you may qualify for.
- You may be able to get a general sense on the type of loan term and product that may be right for you.
- You may get a general sense of payment.
- You may or may not have your credit run and you may or may not have to send in income documentation.
- No guarantee of closing.
- Typically requires a full application (your credit is run and it is recommended that you send in all of your income documents).
- You get a mortgage debt strategy.
- An underwriter will review your application and they have a full application with all the requested income documentation.
- It holds a lot more weight than a prequalification because a prequalification isn’t based on actual documentation.
- It is a pretty safe bet that you will close.
As you can see, getting underwritten pre-approved may take more time upfront, but it could end up saving you time (and heartache) down the line when you fall in love with a home. If you want to get underwritten pre-approved, consider finding a mortgage bank that understands your financial goals. It isn’t always just about interest rates, there is a lot that goes into educating yourself on purchasing property. Contact us today and we can explain everything you need to know about getting pre-approved.