Are you looking to buy a house and wonder how you can get your offer accepted over everybody else’s? In this video, we’re going to explore the difference between prequalification and preapproval. We’ll discuss 3 key areas where a preapproval can give you an edge over the competition.
Preapprovals VS Prequalifications
Finding the right house can take a ton of work on your part. Once you make your offer, you want to make sure you get it accepted. One thing that can help is being preapproved. But what’s the difference between that and being prequalified?
To get a prequalification, you basically just need a heartbeat. Anyone can go online and get a prequalification that includes very little personal vetting. It’s important to be vetted, however, because that will help you in three key areas.
- Presenting the strongest offer. First and foremost, we want you to have the strongest offer you can have. Sellers want certainty, and it’s their agent’s job to make sure they’re not getting their client under contract on a property with a lender and a buyer where there’s no certainty. A prequalification is a conversation about the buyer’s ability to finance a home, but they don’t do enough digging to look into income, assets, and credit.
- Identifying your maximum qualification. Number two, preapproval gives you certainty because you have the maximum amount that you can qualify for. This is really important in hot markets like ours. You’re going to go and look at a home with four or five offers on it, and the price that’s listed online may not be the final price. Knowing the maximum amount you can qualify for, no if’s, and’s, or but’s, is extremely important. A preapproval allows that.
- Budgeting for your monthly payment. Third, and most importantly, a preapproval helps you understand and budget the exact amount of your monthly payment. One thing that I found when I got my first home was that it’s not just the mortgage. There are HOA fees, homeowners insurance, mortgage insurance, principal, interest, and property taxes. There’s a ton that goes into that payment. When I was using those online budgeting tools, which quite frankly don’t give you enough exact information, I thought my payment was going to be $1,500 a month. I found it was over $2,200 a month when I factored in all of the other third-party associated monthly costs.
Get Preapproved With Dwell
When you go through a preapproval with my team at Dwell, we’re not only going to vet you, give you the information, and give you the certainty. We’re going to walk you through the numbers. We’ll make sure that whatever lender you choose, they walk you through the numbers too.
It’s exciting to buy a home, but it’s important to make sure that you’re putting your best foot forward with a preapproval, not a prequalification. Remember that certainty is important for the seller. Understanding the maximum amount you can get and knowing those numbers are key to winning the deal and getting your dream home.
If you have any questions, please feel free to reach out to me and I’ll be happy to connect with you!