There are some differences when it comes down to it, and some advantages to one over the other. Here’s the breakdown of the two so you can decide what best suits you and your needs.
It’s an estimate of how much you can afford and how much money a lender would be willing to loan to you. It’s best to get this letter before you start looking at houses. You should sit down with a lender or chat over the phone and provide information on your income, debts, assers and a potential down payment amount.
The lender provides a ballpark figure in writing of how much he/she thinks you can afford to pat for a monthly mortgage. It’s basically the loan agent’s opinion on being able to obtain financing. only the loan agent’s opinion on being able to obtain financing. A formal approval isn’t issued becase no verifications are made. There isn’t a commitment from either party but it is helpful in figuring out what your price range will be.
This means your loan application has been taken through the verification procedure. The Pre Approval is great because it saves you the time of looking at homes out of your price range and because you will be ahead of the game.
A buyer who makes an offer on a home and then applies fora mortgage is at the mercy of the lender who knows that you don’t have time to shop around for better rates. Being Pre Approved is helpful in a multiple offer situation because buyers generally close escrow more quickly because most of the paperwork has already been taken care of.
It’s important to note that a pre approval is not a guarantee that you will be approved for the loan. The funding will be provided once an appraisal and title search have been done and other verifications check out on the home. It’s not binding either-you can get a mortgage from another lender, although the process will start over and take longer.
Contact the Restivo Team for more information. We know some great lenders and would be happy to put you in touch with them. We will also work closely with you to find the perfect home!