Purchasing A Home How Much Can I Afford?
Getting prequalified for a loan is a quick way to determine what type of home or property is within your price range. Knowing this helps your real estate agent determine which properties to show you, and it helps you make the best use of your time. Prequalification is based on income and debt information provided verbally to a mortgage professional, and is not a commitment to borrow or lend money.
Getting preapproved for a loan represents a commitment from a lender that they will grant you a mortgage loan. Receiving a preapproval letter involves verification of your financial position including credit, income, assets and liabilities. Taking this step can help facilitate the purchasing process by reducing the length of time it takes to close the transaction, and has the potential benefit of putting you in a stronger negotiation position with the seller.