Bruce & Pam Wachter - 
  Your White Mountains Realtors - Buy, sell White Mountains Arizona Real Estate - 
  Show Low, Pinetop-Lakeside Cabins, Homes, Land

Bruce & Pam Wachter, REALTORS
  928-521-1713     928-205-9115

Whether you're buying or selling White Mountains Arizona Property, Bruce & Pam Wachter have the experience knowledge, and friendly attitude to make the process pleasant for you!  Call us for all your White Mountains Arizona Real Estate needs!

Mortgage Pre-approval & Pre-qualified – Key Differences

Before you start house-hunting—finding homes, visiting homes, or even getting the buying process underway by calling your Realtor, it is paramount that you get pre-qualified for your home loan. Even better than that is to get pre-approved. Many people think that the two terms are the pretty much the same and can be used interchangeably, but that’s not true. There’s a distinct difference.

If you are pre-approved, you are considered qualified to receive a loan for a specific amount. If you’re pre-qualified, you are not actually “approved”. Pre-approval is a higher standard of readiness to buy than a pre-qualification. Being pre-approved means you’re ready to buy and have the necessary private resources and the ability to get your loan.

It is important to tell your REALTOR that you are pre-approved as it will tremendously help your position during negotiations with a seller—it tells sellers that you are a serious buyer. In Arizona, you and your Realtor must fill out a Loan Status Report (LSR) at the time you make your purchase offer to the seller. Coming with your pre-approval information puts you head and shoulders above those buyers who have not begun the mortgage securing process. You don’t have to tell the amount for which you are approved, if you don’t want to. But upon writing a contract offer, this information will be necessary. A pre-qualification letter will suffice, but you will have a short time period after acceptance of your contract to get your pre-approval.

Being pre-qualified means that a lender has taken a quick peek at your financial status, just a brief overview, to see if he should go forward with a complete workup for you. It means that based on what you’ve told him (what you think you know about your situation), he feels that you would be successful in attaining a loan—it is LIKELY that you are lendable for a certain mortgage amount.

However, being pre-approved means that the lender has done the workup on your financial status and that you are approved for a certain amount right now. You’re ready to buy.

The advantages of pre-approval are that you can now go house-hunting within a certain range. You KNOW what you can spend. Even if your pre-approval is greater than what you WANT to spend, that’s okay, too. You do NOT have to spend right up to the last dollar that you’re approved for—that’s entirely up to you!

Getting pre-approved does take a little more time than getting pre-qualified, that’s true. But in the longrun, you’ll save a lot of time and the frustration and anxiety that may come when you agree to purchase a home and start the mortgage process AFTER that.