Mortgage Preapproval: First Step in Buying a Home
Buying a home is one of the biggest financial decisions most people will make. Being prepared is a big key to success.
One of the most important steps to take before beginning your home search is getting preapproved for a mortgage.
Prequalification vs Preapproval
While prequalified and preapproved sound similar, they are quite different.
Prequalification
- General estimate of what a borrower might be able to afford
- Basic financial information is required for a prequalification, and in some cases a soft credit check is made.
- Cannot be used when making an offer on a home
Preapproval
- Includes a more in-depth credit review, including a hard credit inquiry, and, therefore, comes with a conditional approval for a loan.
- Can be used to demonstrate you are a serious buyer when you’re ready to make an offer on a house.
Benefits of the Third Federal Preapproval
At Third Federal, we know that a preapproval gives you a clear picture of what you can afford.
With other lenders’ pre-qualifications, you receive only an estimate of how much you can borrow, based on self-reported information. It is a guess by the lender without having verified information available. At Third Federal, a preapproval is much stronger and involves a review of your credit history.
A Third Federal preapproval gives you even more power as a home buyer.
In competitive markets, sellers and real estate agents take preapproved buyers more seriously because it signals that you are a serious buyer with the ability to move quickly. A seller may even prefer an offer from a preapproved buyer over an offer that doesn’t have proof of financing, even if that offer is higher.
