By: Jerika P – i-Lead Realty Social Media Manager
Knowing the difference between pre-qualification and pre-approval is essential when you’re shopping for a home for several reasons:
1. Understanding the Process
Pre-qualification and pre-approval are two different stages in the home-buying process. Knowing the difference between the two can help you understand the process better and make informed decisions.
2. Helps with Budgeting
Pre-qualification lets you know how much you can afford to borrow based on your income, expenses, and credit score. Pre-approval is a more detailed process that includes a credit check and reviewing your financial documents. Knowing the difference between the two can help you budget more accurately and avoid disappointment later.
3. Speeds up the Process
Pre-approval is a more detailed and rigorous process than pre-qualification, and it can speed up the home-buying process. When you have pre-approval, sellers are more likely to take you seriously and accept your offer quickly, as they know you have already been approved for a loan.
4. Helps you Negotiate
Pre-approval can help you negotiate a better deal with the seller. When you have pre-approval, you have more leverage to negotiate a lower price or better terms, as the seller knows you’re a serious buyer who has already been approved for a loan.
5. Saves Time
Pre-approval can save you time in the home-buying process. When pre-approved, you can focus on properties that are within your budget and avoid wasting time looking at properties you can’t afford.
Overall, knowing the difference between pre-qualification and pre-approval is essential because it can help you understand the process, budget accurately, speed up the process, negotiate better deals, and save time.
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Not sure if you want or need to use a realtor? Here are 4 reasons why you should. Watch the video here