Buying A Home: What’s Your Budget?

Pre-qualification is an informal process in which a lender provides an estimate of how much you may be able to borrow based on your income, debts, and credit history. It’s a good way to get a general idea of your borrowing power, but it’s not a guarantee that you’ll actually be approved for a loan.

Pre-approval is a more thorough process in which a lender reviews your financial information in detail and gives you a formal letter stating that you are approved for a mortgage up to a certain amount. This letter is typically valid for a certain period of time and is a stronger indication that you will be approved for a loan when you find a home.

So, which one should you get? It’s a good idea to start with pre-qualification, especially if you’re just beginning to look at homes. This will give you a rough idea of what you can afford and help you narrow down your search.

However, if you find a home that you want to make an offer on, it’s a good idea to get pre-approved before you start negotiations. This will show the seller that you are serious about buying the home and that you have the financial backing to do so.

If you’re ready to start the process of getting a mortgage and want to find out how much you can afford, reach out to a realtor like me! I’ll connect you with our experienced lending partners who can help you get a clear picture of your borrowing power and guide you through the process of getting a mortgage.

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