Pre-Qualified versus Pre-approved, which is better?
Pre-qualified or Pre-approved, which is Better when Buying Your First Home?
You can get a “pre-qualification” letter from a lender fairly easily after a 10-minute phone interview. However, you are in a stronger position to buy if you get a “pre-approval” letter, which means the lender has verified your income in terms of employment, funds on deposit, and your credit history.
Pre-approval may take a few days to a few weeks but it’s worth the effort since it tells the sellers you can get financing. It’s a powerful weapon when it comes to negotiating the price you want, so it’s worth it even if it takes a few days to a few weeks. It tells the sellers you are serious and they may accept your offer even it’s less than someone
else’s because they know you can get financing. On the flip side, without pre-approval, you may put an offer on a home but the seller goes with someone else.
Wondering about more than just the jargon of pre-approved vs. pre-qualified. Here are some other helpful items for first (or second or third) time home buyers!
Here are 7 Needs to Prioritize when shopping for your new home:
- General price range
- Approximate size (in sq. footage)
- General location, area or subdivision
- Number of bedrooms
- Number of bathrooms
- Style and layout of home
- School requirements or districts
When buying a home, consider the future:
- How long do you think you’ll own the home you are interested in? If you want to move in five years, that’s fine. But if you can’t see yourself living there for even a couple years, don’t buy the home because you may not make any profits if there hasn’t been enough time for the home to appreciate in value.
- What the neighborhood will look like in five years?
- What are plans for future development?
- How will they affect your resell value if you don’t want to keep living in this home?
Want to learn more about buying a home for the first time? Read “Top 10 First-Time Homebuyer Mistakes To Avoid.”