Whether you are a first time homebuyer, looking to purchase your second or third home, or are looking into investment properties, the first step that you need to take is to get preapproved for a mortgage loan. It is important not to confuse a preapproval for a loan with a prequalification. Many homebuyers become prequalified and think that they are all set. While this is the first step, there is still more paperwork to do. These two terms sound very similar, but each one can affect your home shopping and purchasing experience quite differently.
A prequalification is the first step toward obtaining a mortgage, and it will give you a basic idea of what type of loan you will qualify for. A preapproval will give you a more accurate idea, and will let people know that you are a serious buyer while you look for a home to purchase. While you may receive similar results throughout each process, they do differ in the following ways:
- Prequalification – A mortgage prequalification is an unofficial estimate of how much you are eligible to borrow. This amount is determined by a number of different factors, including your income, credit history, and any debt that you may have. Buyers can often get preapproved for a mortgage in Pompano Beach over the phone or online. Getting prequalified is a great first step if you are looking to purchase a new home and want to know how much you will be able to borrow.
- Preapproval – A mortgage preapproval moves you much closer toward a commitment when you are looking to purchase a home. In order to become preapproved, you will have to submit several different documents to your mortgage company in Pompano Beach. You will need to provide proof of employment and income, bank statements, W2s, and your mortgage lender will also need to pull a credit report. Once you receive a mortgage preapproval, you will know the maximum amount that you are approved to borrow in order to purchase your next home.
When you are prequalified for a mortgage, feel free to browse the housing market and keep an eye out for homes that you would like to purchase. When you become serious about buying is the best time to get preapproved. When you are preapproved for a mortgage loan in Pompano Beach, you will benefit from more bargaining power and you will be in the perfect position to make an offer on a home and begin negotiations. Here at Ace Mortgage Loan Corp., we love helping our clients secure mortgage loans in Pompano Beach. If you are interested in becoming preapproved or prequalified for a home loan in Pompano Beach, call us at (954) 777-4774 today.