If you’re buying a new home in the Tampa Bay area, you probably need to talk to a lender so you can get a mortgage. That’s just part of the process for most people.
However, for many buyers, the rest of the details are a bit fuzzy.
Prequalification vs. Preapproval: What You Need to Know
When you talk to a lender, you’ll have the option of asking for the lender to prequalify you or to preapprove you for a loan.
There are some key differences between the two – and while each has its benefits, you need to know the difference.
What is Prequalification for a Loan?
Prequalification is a process that includes you talking to a lender about your financial circumstances. You’ll tell the lender about your credit, income and assets – but the lender won’t run a credit check on you. Instead, the lender will tell you how much of a loan you qualify for if your circumstances don’t change (and if they’re exactly as you’ve said they are).
What is Preapproval for a Loan?
Loan preapproval is more in-depth than prequalification is. During the loan preapproval process, you’ll disclose your financial circumstances to the lender, but the lender will also run a credit check and ask for verification. You’ll probably need to bring in supporting documentation, such as W-2 forms, paycheck stubs and bank statements.
Prequalification and Preapproval: What’s Better if You’re Buying?
A prequalification can help you narrow down your home search because it lets you know how much house you can afford.
However, if you’re a serious buyer, it’s typically better to get lender preapproval. That’s because you’ll know exactly how much you can afford and because sellers can take your offer more seriously when they know you can actually buy.
Are You Buying a Home in Tampa Bay?
If you’re looking for a home in the Tampa Bay area, we can help you find the right one.
Call us at 727-584-8480 or 813-961-6000. If it’s easier, feel free to contact us online. In the meantime, feel free to check out our: