Getting prequalified has always been a good idea, and in the current market it is necessary for your offer to be considered.
A prequalification is an estimate of the amount of mortgage loan you qualify for based on your credit history, income, assets and financial profile. A prequalification gives you an idea of how much home you can really afford and is a signal to real estate agents and sellers that you are a serious buyer. Furthermore, a prequalification makes the loan process easier, and allows you more buying power when you are ready to make an offer on a home.
During the prequalification process, we will discuss loan options, down payment requirements, and current interest rates. You may be asked to provide documents such as pay stubs, tax returns, etc. to verify your income. In fact, the more information you can provide, the more precise your estimate will be. The best time to begin this process is before you start searching for a home.
Is there a difference between being prequalified vs. pre-approved ?
- Prequalification – A prequalification is an analysis of your credit report and mortgage application. We use the information provided by the borrower to determine the correct price range and loan program that will best fit the borrower’s needs.
- Pre-Approval – A pre-approval is an analysis based on the credit and application, but also includes a review of the documentation such as paystubs, W-2s, bank statements and tax returns. The pre-approval goes one step further to confirm the information on the application is correct.
It is important to speak with a BankSouth mortgage professional since there are a variety of mortgage programs available, each with its own qualifications and benefits. A prequalification determines what loan type is right for you and your financial situation.