Pre-Qualification vs. Pre-Approval
One sure way to reduce stress during the process of home buying is to seek pre-approval. Buyers who are pre-approved are taken more seriously than their pre-qualified counterparts or buyers who have not talked to a lender yet..
Pre-qualification is not a loan commitment from a lending institution; it is only a loan agent’s opinion that you will be able to obtain financing. Virtually anyone can achieve pre-qualification status.
Pre-approval, on the other hand, signifies that the application has been taken through a rigorous procedure. Pre-approved buyers enjoy these benefits:
1. If you make an offer on a home and then apply for a loan, you are at the lender’s mercy. He sets the interest rate and points, aware that you do not have time to shop around. (get Pre-Approved before starting your home search)
2. Pre-approval saves time spent looking at houses you can’t afford.
3. If you rely on your lender to tell you what you can afford, you may end up with a high mortgage payment. Most people can qualify for more than they feel comfortable paying.
4. Having a pre-approval letter from a lender gives you an edge when multiple offers have been made on a house.
5. Pre-approved buyers can generally close escrow more quickly. Once you submit your credit package, most of the legwork has already been done.
I suggest always using local lenders when getting pre-approved. They know the market and appraisers in order to get the home you want under contract and to closing quicker. Two that I highly recommended are:
Both companies have office in Temple, Belton & Salado