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If you have any questions or need more detailed information, please feel free to contact me via phone at 301.613.7253 or fill out the form to let us know how we can help with your real estate needs.

Office Location 795 Rockville Pike,
Rockville, MD 20852
Phone: (301) 613-7253
Fax: (301) 424-9290

Why be Pre-approved?

(Pre-qualification vs. Pre-approval)

There are few things more devastating in the home search process than falling in love with a home then finding out that it is out of your price range.  Pre-approval, not prequalification is the best way to assess with a lender what you officially can afford in monthly housing payments.  Pre-approval also tells a seller that you as a buyer are ready to purchase now.  It gives you more leveraging power in negotiations.

The difference between prequalification and preapproval is the amount of proof and documentation given to the lender.

PRE-QUALIFICATION is more of an introductory process that lenders use to assess your current financial status.  It is not usually based upon strong documentation and can rely heavily on what you say you are worth and what you currently owe.  A credit report may be run as well to check credit worthiness.

PRE-APPROVAL varies in the fact that lenders set out to prove your financial stability through credit check, documentation of your true earnings (tax returns, paystubs, etc.), income to debt ratios, bank statements, etc.  The only thing left to help you fully qualify for a home is some final documentation that can only be completed once you have identified your home, such as appraisal of the home's value, purchase of title insurance, and required inspections (like termite/pest inspections).  It will give you a true sense of the price range of the home that you should be looking for to avoid any disappointment.

More articles:

  • Investing in real estate
  • Why be pre-approved? (Prequalification vs. Pre-approved)
  • How does the settlement process work?
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