Prequalification vs Preapproval

There are differences in the home buying process of every market, which is why YOU NEED a local expert.

One example of this critical step in the process is the question that often gets brought to me. I have a prequalification letter; am I ready to shop for homes? The answer to that question can end up costing you thousands of dollars if you don't have the right guidance.

I'm Marcus Koss, Principal and Managing Broker in Oregon and Washington. We've helped save hundreds of buyers that could have cost them thousands of dollars. Let me tell you how.

A pre-qualification is not an approval. You can think of it more as an initial step in the purchasing process where you discuss your financial situation with the loan officer and get an idea of how much you might be approved for, but nothing is verified. The pre-approval takes this process one step further, where you provide the lender with all the necessary documentation to find out what you are approved for, which loan product is the best option for you, and get a close estimate of your interest rate and final cost. Now, let me be very clear. We want to go through that entire approval process. When you do this, the lender has done things like verify your employment, review your taxes, check your bank statements, and get all the information they need to let you know how much they will loan you and your payment. The result will be a pre-approval letter for you then to provide to the seller of a property.

Here's why you must go through this step before you go home shopping. A seller may not accept your offer without the pre-approval already being complete. It's their proof, after all, that you can actually fulfill the contract that you've written. I have seen many potential buyers miss out on great purchase opportunities simply because they had not yet done the necessary step of obtaining their pre-approval letter. So don't fall into the trap that some lenders leave for you online. Reach out to us, and let us walk you through the safest and most strategic way to become a homeowner.

As always, I'm Marcus Koss, your:

Local.

Expert.

Realtor.

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