If you are a homebuyer, you must relate to these two terms Pre-Qualification and Pre-Approval Mortgage. However, mortgage pre-approval and mortgage pre-qualification are the two different things that you must understand.
Both these terms are essential aspects of purchasing your dream house. You have to submit your personal information and bank details to get a pre-approval. According to your documents and finacial condition, you will get the loan amount from bank or morgage lender. Here in this article, you are about to know the difference between pre-qualification and pre-approval mortgage Aurora.
Pre-approval vs Pre-qualification- Overview
If you are looking to purchase a property, you must need a pre-approval or pre-qualified for the mortgage. However, these two steps are the most vital aspects for gearing up your mortgage application process.
However, most people get confused between pre-approval and pre-qualification. They feel that these two terms are the same. But it is not right. Both are the two different that you should understand.
However, pre-qualification is a step before getting a pre-approval for a mortgage. Then you have to go for the mortgage pre-approval. We can say that pre-approval is like the final commitment to getting a mortgage.
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Pre-qualified
Pre-qualified means submitting your personal financial details involving income and debt assets. However, you can pre-qualified on your phone online now.
After submitting your details, the lender will review your details and estimate how much mortgage you should get. However, getting a pre-qualification letter is a speedy task. It takes around two to three days to get pre-qualified.
Moreover, remember that the pre-qualification process does not require any analysis of credit reports. It will not check your ability to purchase a home.
Before getting a pre-qualification letter, the lender will discuss your goals and needs regarding the mortgage. He will explain the various vital options of mortgage and tell you which one will suit your financial needs.
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Pre-approval
Getting a pre-approval is the most vital step to purchase your dream house. However, pre-qualification will tell your ability to purchase a home and your creditworthiness. But a pre-approval is the final statement of getting a mortgage.
Getting pre-approval is the official statement of getting the mortgage application successful. You have to submit all the necessary documentation to the lender. Then the lender will start checking your credit report and financial background.
After checking thoroughly, the lender will assign the pre-approval mortgage to you with a specified amount. However, getting a pre-approval mortgage Aurora will help you get a better idea of the interest rate.
Moreover, a lender will write a commitment letter that will allow you to look for the homes at or below the price level. So you are at a significant advantage after getting a pre-approval for a mortgage.
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What amount of time does it take to get pre-approved or pre-qualified?
If you are a serious homebuyer, you must understand that both these terms take different times. However, getting a pre-qualification letter is a speedy step. Moreover, you can get a pre-qualification over your phone online.
On the other hand, you have to submit lots of documentation to the lender to get a pre-approval. So it will take more time than getting a pre-qualification.
However, it will take about ten business days to get a pre-approval letter in your hands.
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What documentation should you submit to get pre-approved or pre-qualified?
If you want to get a pre-approval, you have to submit your income information, credit check, details of your bank accounts, down payment, your desired mortgage amount. Remember that you do not have to submit your tax information to get pre-qualified.
On the other hand, if you want to get pre-approved, you have to submit copies of pay stubs, credit check, bank statements, down payment amount, desired mortgage amount, and personal, business tax returns. If you have a good score in credit, it will be easier to get you loan from the lenders and you can burgain with the rate of interest with you mortgage broker or lending partner.
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Mortgage pre-approval vs pre-qualification- Which is the best?
Most of the time, getting pre-qualification letter is helpful for the first-time homebuyer. However, getting pre-qualified will let you know your ability to borrow and your budget.
On the other hand, getting a pre-approval mortgage Aurora is beneficial if you make a final commitment to purchase your dream house. A pre-approval letter will give you the confidence to stand out against other potential buyers in the competitive market.
So if you are a serious homebuyer, you must get pre-approval to get the best deal that suits your financial needs.
Wrapping up
We hope this article removed your confusion between the mortgage pre-qualification and pre-approval mortgage Aurora. However, mortgage pre-approval must required before buying a property. Remember that you must submit some necessary documentation to get pre-approved.
