While visiting one of your favorite Texas neighborhoods you come across a lovely colonial that has just been put on the market. It has everything that you want in a home for a price that is in the range of what you know you can afford. You arrange a visit to the home and you not only like what you see, you love it! Quickly, you make an offer fully expecting that the owner will accept it. However, there is a problem -- a big one -- that will scuttle your purchase because you confused an important issue: pre-qualified vs. pre-approved for a home mortgage. Regrettably, the couple that came in immediately after you got the house because they were already pre-approved for their home mortgage. Your dreams have been dashed all because of a misunderstanding that did not have to happen. Please read on to find out the distinction between two very different approval procedures and what you must do to ensure that you are adequately equipped before bidding on a home.
Not much else in life is more disappointing than to find your dream home has been sold to someone else. Even worse, discovering that you could have had the upper hand in the home buying process had you sought pre-approval for a Texas mortgage loan first. Whether you are seeking a regular home mortgage or one backed by a government entity such as an FHA Loan or a VA Loan, having everything in place before you start your home search can save you a lot of aggravation and grief later on. Quite simply, a little bit of preparation and foreknowledge can spell the difference between you getting the home of your dreams or seeing those same dreams dashed.
Getting pre-qualified for a home is something that is usually done by a realtor. Generally, this person wants to see that you can afford to purchase a home before spending valuable time with you. Sometimes a realtor will want certain financial information from you before beginning to help you find a home. This can include salary information, down payment amount available, or anything else they may require before moving forward. Prequalification is a fairly informal process that does not involve the running of credit reports or the submission of detailed financial information. Essentially, it is your word to the realtor that you can afford a certain home.
On the other hand, a pre-approved home mortgage loan goes well beyond a prequalification. Detailed financial information is given to your mortgage broker who will then determine your creditworthiness. Your salary, debt level, credit history and credit score are all some of the things that come into play when determining whether a pre-approved Texas mortgage will be granted. For the most part you aren’t committed to the home mortgage, but you can take the pre-approval with you when negotiating to purchase a home. In addition, a qualified and knowledgeable mortgage professional can supply you with the information you need regarding an FHA Loan or a VA loan and how best to approach these application processes.
A pre-approved mortgage loan is much more valuable to a home seller than prequalification. It can take 4 – 6 weeks for you to get a home mortgage approved, if you were not pre-approved (in other words you were prequalified for your mortgage). Whereas the pre-approved individual will get to closing within approximately one week (3-10 days depending upon the lender) after they notify the mortgage broker of their home choice. If you are already pre-approved for a mortgage, this step is usually taken as a clear signal to the seller that you are serious about buying their home. Importantly, if the seller is in a rush and there are two parties interested in buying the home, the one who has a pre-approved home mortgage will beat out the party who is simply pre-qualified.
So, if you are serious about purchasing a home, visit a Texas mortgage broker before starting the home buying process. Your realtor can be a valuable resource to help you find your dream home, but they usually will only pre-qualify you for a home, while an experienced Texas mortgage broker can pre-approve you for a home mortgage and share valuable information with you about a VA loan or an FHA loan. Pre-qualification or pre-approval for a mortgage loan is a simple, yet distinct difference; knowing the best road to take can spell the difference between getting your dream home or watching those same dream evaporate before your very eyes.
If you are looking for articles for your web site or your newsletter on this topic and many other topics, may I recommend http://groups.yahoo.com/group/Free-Reprint-Articles for the best selection. Copyright: Copyright © 2006-2008 Frank Oakerson, All Rights Reserved
About the Author:| Frank Oakerson is licensed loan officer #56753 in the state of Texas. I am available to assist you in purchasing your first home, bad credit mortgage, FHA Loan, VA Loan, you name it. At http://www.yourmortgage123.com you will find a number of informative articles, mortgage calculators, info on VA loans, mortgage refinancing, stop my foreclosure, and getting pre-approved. Stop by and let me get started on a Texas mortgage for your property today. I have all of the information and tools you need to make your home buying dreams a reality.
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