One of my goals on Lake & Luxury Chicago is to be a resource for first time home-buyers.
While you can learn a lot from Zillow and Google, the purpose of this resource is to be a bit more of a Real Estate 101 - easier to understand and relatable.
Today, we tackle the topic of being pre-approved vs. being pre-qualified for a home loan.
To get pre-qualified, you can visit here, here, or here. Just input your information and out pops an estimate of the home you may be able to afford. But who's to say you didn’t fudge a little on your income or your credit score? No one is going to know, but down the line, that number is going to matter.
So, if your intentions are to buy, the best thing to do is to get a pre-approval letter from a lender.
Being pre-approved differs from being pre-qualified because of the information you provide. When you get pre-approved, you show documentation of income, taxes, ect. A lender takes all of your information and puts together a letter stating the amount you can afford.
Both options are painless! Why take the time to do them? Well, you wouldn’t want to go on the hunt for the perfect pair of nude pumps, just to find out at check-out that you can’t afford them. Right? The first thing you should have done, before you went shopping, was to check your bank account! How much shoe money do you have? Now you’ve wasted your time, and worse of all, now you missed out on those new shoes that are sold out everywhere.
Same goes for getting pre-approved for your mortgage. Do your homework and check out how much you can spend, before you go shopping for a house. That way, you and your agent are prepared with the knowledge and the letter that can win you the deal!
How can the letter win you the deal, you ask? Check back next Friday for more Real Estate 101!