Pre-approval is as close as possible to confirming your creditworthiness without a purchase contract. You will complete a mortgage application and the lender will verify the information you provide. They will also perform a credit check. If you have been pre-approved, you will receive a pre-approval letter, which is an offer (but not an obligation) to lend you a certain amount for 90 days. Unlike prequalification, pre-approval is a more specific estimate of what you might borrow from your lender and requires documents such as your W2, current pay slips, bank statements, and tax returns. Pre-approval is a smart decision if you`re ready to make an offer for a home. This shows sellers that you are a serious buyer and that you can get a mortgage – making it more likely that you will complete your home purchase. If you`re ready to fulfill your dream of owning a home, you`ve probably already heard that you should consider pre-qualifying for a mortgage or getting pre-approved. It`s time to understand exactly what each of these terms means and how they might help you. And when you`re working towards such a big goal, you want all the benefits. Pre-qualification is also an opportunity to learn about the different mortgage options and work with your lender to find the right solution to your needs and goals. In addition to their different roles in buying a home, pre-qualification and pre-approval can take different durations. Prequalification at Bank of America is a quick process that can be done online, and you can get results in an hour.
For mortgage pre-approval, you will need to provide more information so that the application will likely take longer. You should receive your pre-approval letter within 10 business days of providing all the requested information. Check out current interest rates and other financing options on our mortgage homepage You can qualify to borrow more money than you`d like to comfortably spend on a home. But that doesn`t mean you have to spend more. It`s a good idea to limit your home search to homes that are charged an amount you can comfortably afford. Explore the mortgage amount that best fits your overall budget using Bank of America`s Home Affordability Calculator Pre-qualification is a first step in your home buying journey. When you`re pre-eligible for a home loan, you`ll get an estimate of what you might be able to borrow, based on the information you provide about your finances, as well as a credit check. This can be easily and conveniently completed online, in person or over the phone in minutes with basic information such as your income and expected down payment. . First-time buyers are more likely to find it helpful to be pre-qualified, especially if they want to set their home purchase budget and get an idea of how much they can potentially borrow.
. Are you ready to pre-qualify, get pre-approved, or apply? Start with the digital mortgage experience. Whether you opt for pre-qualification or pre-approval, you`ll have a better idea of what`s in your price range and can search for a home with confidence. The lender will then use these documents to determine exactly how much you can pre-approve to borrow. Pre-approval can be extremely valuable when it comes to making an offer for a home, especially in a competitive market where you may want to stand out from other potential buyers. Again, a seller will be more likely to consider you a serious buyer because you`ve checked your finances and credit score. . Once you`ve been pre-approved, you`ll have 90 days to find a home you love. Then you can block your rate and complete your request. . If you want to talk to a lender to set a general range of home prices, you can get a prequalification, which is simply a lender`s estimate of what you could potentially borrow. .
Expect surprises! Lenders look at every detail of your finances when they give pre-approval. For example, you may be asked for a car loan payment that you made with a credit card. Be prepared to answer lenders` questions as soon as they arise. If you want to gain a competitive advantage over other buyers in the market, you can get pre-approval. With pre-approval, sellers know you`re already eligible for real estate financing, which greatly increases your chances of your listing being selected… If you are looking for a home, you may be asked to be pre-qualified or pre-approved. Before you start, it`s important to understand the difference. .