Prequalification vs Preapproval: What’s the Real Difference? better mortgage pre qualification | Law Fundix LLC

Are You Prequalified for $250,000? 550,000 Dollars? 1,000,000 Dollars?

Amazing, right? Haha, I know! They must think I'm rich by following Law Fundix LLC  blog. Welcome to the Red Desk, your home away from home that you still haven't bought. We will discuss the differences between prequalification and preapproval in today's article on Law Fundix LLC blog, guiding you towards your dream home.
You can check this article for pre qualify rocket mortgage | preapproval rocket mortgage | Law fundix LLC . 

Mortgage Prequalification Letters: Are They Junk?

These letters? They're not fan mail. This is just an unsolicited pre-qualification notice from every bank and lender that's ever gotten a hold of my data. 99% of it? Complete junk. Okay, dear follower, let me make the matter easier for you, get rid of this unwanted mail, and delve into it by Law Fundix LLC.

If you don't understand how pre-qualifying for a mortgage differs from being pre-approved, you are not alone, dear follower of our blog. But take care. They are the most confusing parts of the home buying process.

Mortgage Pre-Qualification vs. Pre-Approval

Mortgage Prequalification: A Starting Point | Law Fundix LLC

With us, the buying process is very easy. Pre-qualification is an excellent way to gauge your financial capabilities and current circumstances. Ultimately, it's more important than the participation trophy.

Most people can prequalify for something. You pre-qualify! You pre-qualify! You pre-qualify! Seriously, if my dog had opposable thumbs and an actual income, he could prequalify. Simply provide them with your name, your income, and your employment history, and a lender will provide you with a range. The wide variety you receive is merely an estimate. Don't get too excited.

Mortgage Preapproval: instant prequalification mortgage | The Next Step | Law Fundix LLC

All right, so you have prequalified! Congratulations! I guess. Now it's on to the excellent stuff. Welcome to the big leagues! Time to get preapproved. You would know a lot more about your financial health and exactly how much house you can handle in this process. A pre-approval is an exact loan amount, not a mail-in estimate.

A pre-approval involves a rigorous credit score test to determine your debt load and payment history. The less debt you have when applying for a mortgage, the better. Sellers will take your offer more seriously once you receive preapproval. Most sellers will, as a matter of fact, require it. But remember, pre-approval is not a commitment to lending.

Appraisal and Rate Lock | Law Fundix LLC

Once you are preapproved, the house you find has got to go through an appraisal to qualify. And since you usually can't lock in your rate until you find the house, the whole amount and the conceptualized month-to-month payment are pretty much based upon a hypothetical hobby rate.

Check Your Credit and DTI | Law Fundix LLC

First, take a good hard look at your credit. If your credit spanks, you've got options. That's a rabbit hole for another episode. Got some debt? Well, as much as you can, you should pay it back first or pay off as much of it as possible. Corporate medicine determines your ability to qualify for different loan options based on something called DTI (Debt-to-Income ratio).

DTI compares your monthly mortgage payments, plus other debt payments, to your gross monthly income. To have the best chance of qualifying, you must keep your DTI percentage below 50%. For example, if you take home $5,000 per month in gross income and have $1,250 worth of debt to pay back every month, you're in good shape with a 25% DTI.

Shopping for the Best Rates 

It's a bit tedious, but the more information you provide, the better. The last step involves comparing the rates you receive. As you shop around, you'll notice some rates are higher than others. The lower rate is the basis for your monthly payment. The APR is included in the base rate, as well as other charges like mortgage insurance and closing costs.

The Importance of Preapproval | Law Fundix LLC 

Did you know, my dear, that getting pre-approval is a great idea if you are interested in buying a home in the near or distant future? It is considered a crucial step, as it can help you act quickly as soon as you find your perfect home.  The earlier you finish your paperwork and have everything ready, the much better it will be, and it will speed things up significantly, although other factors like assessment, inspection, and title work may still cause delays.

Conclusion: Prepare for Your Dream Home

In the end, dear followers Law Fundix LLC blog,, I hope you feel more comfortable with this process. Even if you haven't found your new home yet, obtaining preapproval can help you act quickly once you do. At least don't be shy! Advance! My friends at Rocket Mortgage can determine your finances. Rocket Mortgage.