If you’re new to the home buying process
, chances are you’re hearing a lot of new jargon. It can be challenging at first to tell your ARM from your PMI. It gets even worse when you hear terms like “Pre-Approved” and “Pre-Qualified” used interchangeably. They may sound similar, but they mean drastically different things when it comes to getting a mortgage.
There are more than a few new terms you’ll learn during the process of buying your first home. However, these two are important. And knowing the difference is the first step toward becoming a home buying pro.
What’s best for you?
It depends on what you want to accomplish. Are you more curious and early in the process? Or are you looking to tell a seller and your real estate agent that you’re serious about buying?
When bankers tell you you’re pre-qualified, that means they’ve made an informed guess about what kind of mortgage
you’re qualified for. There’s no guarantee or binding agreement at this point. Pre-qualified means your banker has taken a high-level look at your financial situation and has made a recommendation based on assets, debt and income. Getting pre-qualified gives you a good idea about what you can afford, and what price range you should consider when looking at houses.
Pre-approval is the real deal. That means your banker
has reviewed all relevant financial documents, and has brought them to an underwriter who then gives written confirmation that you’re approved for a loan. It’s a little more involved than pre-qualification time-wise, but it will save you time in the long run. It lets your real estate agent know you’re serious and ready to buy. Plus, this allows you to act quickly when you find “the one.”
How do I get pre-approved?
Now that you’ve boosted your Mortgage IQ, it’s time to act. Schedule a meeting with a mortgage banker
who has experience and an impressive track record for moving quickly.
Once you make an appointment, gather your financial records to provide an accurate look for the banker and underwriter.
From there, it’s up to your mortgage banker to get back to you and initiate the home buying process. At National Bank of Commerce, you can often get pre-approved in a matter of hours to a matter of days. We do everything locally. Our mortgage banking is built for speed.
Because when you find your dream home, you don’t want to wait.