Buying a property, whether it’s your first time or not, is a huge investment.
Going serious from the get go is how you should proceed.
According to MortgageOgden.com, other than buying the actual property itself, you will have to identify the costs that would flow in after you sign the deal. This is where the utilities, the processing, and closing fees factor in.
Before you initiate any action at all, know how to correctly estimate your lending power and assess your current financial standing. One way to accomplish this is to apply for either a pre-approval or a pre-qualification.
What Does It Mean to Be Pre-approved?
If you want a more accurate estimate, a pre-approved loan is the best option for you. The pre-approval process considers your credit statements, personal/character evaluation, and current debt and income ratio. This is similar to how the actual mortgage application process works. You can consider a pre-approved loan as mock mortgage approval that you can use later on when getting the actual loan.
Pre-qualification Depends on the Ability of the Banker to Estimate
For rush requirements, pre-qualifying is faster and more popular because it doesn’t pull out your credit report. That’s why it may be less accurate. The estimation would depend on the lender’s ability to forecast your financial capability based only on your debt and credit score. Pre-qualification doesn’t require sensitive data such as social security numbers. Note, however, that pre-qualification doesn’t guarantee mortgage approval.
As a rule, aim to get a loan pre-approval or pre-qualification from only one bank or lending partner. This gives you the guarantee that the numbers they will provide will be the same on the actual mortgage application itself.