When looking to purchase homes for sale in Encinitas it is important to know the difference between mortgage pre-qualification and pre-approval. Knowing the difference when you go to buy homes for sale in Encinitas will help you know exactly where you stand.
What do the terms pre-qualification and pre-approval mean and how do they differ?
A pre-qualification is basically an estimate of how much you can afford and how much a lender will provide for you based on your financial information including income, assets, and debt. Pre-approval involves the completion of a mortgage application and is essentially a tentative commitment to lend based on the information provided in the application.
What are the benefits of getting pre-approved?
Getting pre-approved as a buyer for Encinitas homes has multiple benefits. Some of those benefits include:
- You will know exactly what you can afford, which will allow your Encinitas real estate agent to narrow the search of homes to that price range. This will save you a great deal of time in your search for homes.
- Sellers prefer that potential buyers have already been pre-approved for a loan as it shows that the buyer is serious about purchasing the home. Should you find the home that is right for you, you will be able to put in an offer and have it seriously considered.
- The closing on the home tends to be expedited for those that have received pre-approval.
- When your credit has already been reviewed it means that there is far less of a potential for surprises later in the lending process.