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Pre-Qualification or Pre-Approval?

If you’re ready to make your dream of owning a home a reality, or if you are ready to upsize or downsize, you know the importance of getting pre-approved for your mortgage loan.  But what is the difference between pre-qualifying and pre-approval?

Before you embark on your house hunting journey, determine what you are comfortable spending, both in a down payment and monthly mortgage payment plus other fees.  What you qualify for and what you are comfortable with are not necessarily the same.

Prequalification is an early step in your home-buying journey.  This just gives you an estimate of what you might be able to borrow based on information you provide about your finances and a credit check.

Preapproval is as close as you can get to confirming your creditworthiness without having a purchase contract in place.  If you are preapproved you will receive a preapproval letter, which is an offer (but not a commitment) to lend you a specific amount.  This approval is usually good for 60-90 days, and a smart step to take when you are ready to put in an offer on a home.  It shows the sellers that you are a serious homebuyer and that you will be able to complete your purchase of the home.

In today’s market, where houses are flying off the shelf and sellers are being bombarded with multiple offers, being preapproved is a huge plus in your offer process.  It also will save you time by only looking at homes that you can afford.

If you get declined for your preapproval, don’t despair!  Ask the Lender to explain why you were declined.  If your credit score was too low, or you have difficult to prove income, bankruptcy, etc. which is somehow not qualifying you for a home loan at this time, then Sun Pacific Mortgage can rescue your homebuying efforts based on your loan-to-value.  We offer private money loans that are equity based and not based on a credit score.

Give us a call at 707-523-2099 or visit our website at www.sunpacificmortgage.com to see if we can come to your rescue when things look bleak with your mortgage search.