Interested in Your Own Personally Branded Magazine? Click Here!

Want to customize this content for your business?

Learn More

Categories

  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining

  • Printables
  • Videos


General

  • About the Magazine
  • Advertise
  • Copyright
  • Privacy Policy
  • Cookie Policy
  • Careers


Editorial

  • Editorial Calendar
  • Issue Archive
  • Contact Us
  • Pitch an Idea

American Lifestyle Magazine Logo
  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining
  • Search
  • Follow
  • 0 Heart
  • |
  • Food & Recipes Categories
    • All Recipes (746)
    • Appetizers (134)
    • Breakfast (59)
    • Cooking Tips (41)
    • Desserts (213)
    • Dinner (227)
    • Drinks (59)
    • Gluten Free (9)
    • Healthy (63)
    • Quick & Easy (56)
    • Vegan (29)
    • Vegetarian (46)
All Recipes | Apr 26, 2022

Simple Spring Alfresco Dining

  • Holiday & Entertaining Categories
    • Christmas (77)
    • Easter (14)
    • Entertaining (40)
    • Father’s Day (6)
    • Halloween (29)
    • Hanukkah (14)
    • July 4th (33)
    • Mother’s Day (8)
    • New Year’s (19)
    • St. Patrick's Day (11)
    • Thanksgiving (33)
    • Valentine’s Day (5)
artistic-easter-eggs
Crafts & DIY Projects | Apr 11, 2022

Earthy Easter Eggs

  • Decor Categories
    • Crafts & DIY Projects (272)
    • Curb Appeal (5)
    • Decorate (62)
    • Interior Design (77)
Decor | May 19, 2022

Maximizing Home Style with Designer Bari J.

Urban Design Associates
Interior Design | Apr 22, 2022

Architects Of the Wild West

artistic-easter-eggs
Crafts & DIY Projects | Apr 11, 2022

Earthy Easter Eggs

  • Real Estate Categories
    • Buying & Selling (195)
    • Home Trends (20)
    • Staging (20)
    • Your First House (31)
landlord-tips
Buying & Selling | Feb 9, 2022

Beginner’s Guide to Being a Landlord

Buying & Selling | Jan 26, 2022

8 Things Not Included in a Home Inspection

virtual-home-tour
Buying & Selling | Jan 19, 2022

The Pros and Cons of a Virtual Home Tour

  • Life & Culture Categories
    • Editorial (272)
    • Family & Pets (193)
    • Finances (22)
    • Health (154)
    • Travel (231)
Canine Stars
Editorial | May 2, 2022

Pup Performances With A Purpose

Hilton Head
Travel | Apr 25, 2022

Lowcountry Life

Anita Yan Wong
Editorial | Apr 20, 2022

Brushstrokes and Progress

  • Home Categories
    • Cleaning (41)
    • Organizing (45)
    • Home Improvement (121)
    • Outdoors & Gardening (83)
Home | May 10, 2022

Prepare Your Patio with the Perfect Accessories

Home | May 4, 2022

How to Stop Bugs from Ruining Your Summer

Outdoors & Gardening | Apr 11, 2022

Never Mow Your Lawn Again

Follow us on social media today!

Facebook Twitter LinkedIn

What’s the Difference Between Prequalified and Preapproved?

Your First House | By Nathan Smith | 0 Likes
SHARE
Facebook Twitter LinkedIn More

The homebuying process comes with a language all its own, and two of the terms you may have heard are prequalified and preapproved. While both can be essential parts of obtaining a mortgage and buying a home, you may not know what they mean. Check out the information below to learn how each term may benefit you during your home search.

What Does it Mean to Prequalify? 

When you prequalify for a home loan, it means you’re getting an estimate of how much you may be able to borrow based on the information you provide about your finances and your credit check. While it isn’t as formal as being preapproved, getting prequalified is an excellent first step when you begin your home search, as it will help you establish your budget and know how much you may be able to borrow. This process will also introduce you to the various mortgage options you have to choose from.

Information needed for prequalification includes:

  • Credit check
  • Income information
  • Debts and assets
  • Bank account information
  • Down payment amount

The prequalification can be completed online, over the phone, or in person. You’ll receive a prequalification lender, which you can use to show an agent or seller that you’re serious about buying. Although it can be helpful, a prequalification isn’t seen as being as serious as preapproval. The lender goes off the information you provided and does not verify everything you’ve given them is correct, up to date, and comprehensive. Meaning, while you may get a loan for the amount stated, it can also change when a lender does a more thorough check.

What Does it Mean to be Preapproved?

The preapproval process involves a lender investigating your income, assets, credit history, and debts before providing you with an amount they believe you can afford. Getting preapproved confirms to the seller that you’re serious about buying their home and that you can secure a mortgage, making you more likely to complete the purchase. Being preapproved can be extremely valuable in a competitive market, as it will help you stand out from the other homebuyers.

You don’t have to receive prequalification for preapproval. If you know you’re financially prepared to buy, you can decide to move ahead to the preapproval process.

Information needed for preapproval may include:

  • Credit check
  • Paystubs from the last thirty days
  • Bank statements from the previous two months from all accounts
  • Investment account statements from the last two months
  • W-2 and 1099 statements from the previous two years
  • Federal tax returns from the last two years
  • Driver’s license
  • Social security number
  • Total monthly expenses
  • Down payment amount

Additionally, if someone is helping you pay for the home, you’ll need a gift letter signed and dated by the individual assisting you.

Once you submit this information to a lender, you should receive their decision within ten business days. If you are preapproved, you’ll receive a preapproval letter informing you of the offer to lend you a specific amount for sixty or ninety days, along with the type of mortgage the lender is willing to offer. Since the lender verifies the information you provided, this is a much more serious step than prequalification.

While you may receive preapproval for a mortgage, it’s important to remember it does not guarantee a mortgage. If there is a change to your income, assets, or debt level before the closing date, a lender may decide to deny the loan.

Prequalification and preapproval are just a part of the mortgage application process. Check out this list of nine things to consider before and during this critical part of the journey to finding your next home.

12195 Views

This article is tagged in:

First Time Home BuyerHome BuyerHome BuyingLenderMortgageReal Estate Tips

Related Posts

landlord-tips
Real Estate | Feb 9, 2022

Beginner’s Guide to Being a Landlord

Real Estate | Jan 26, 2022

8 Things Not Included in a Home Inspection

virtual-home-tour
Real Estate | Jan 19, 2022

The Pros and Cons of a Virtual Home Tour

Real Estate | Jan 19, 2022

6 Ways to Overcome the Emotions of Selling a Home

location-location-location
Real Estate | Jan 9, 2022

Plant Your Roots: Picking Your Home Location

Popular Posts

can-planters-card
Staying Home | Mar 25, 2020

Make Your Own Can Planters

Plan Your Home Projects | Jul 8, 2021

Tips for Redesigning Your Patio Space

12-Direct | Feb 17, 2020

Trash vs. Recycle: Do You Know When to Trash it?

Real Estate | Dec 14, 2017

House Selling Checklist

home office with white furniture
Life & Culture | Mar 30, 2020

Everyone Is Working From Home—Here’s How to Do It Effectively


You may also like:

can-planters-card
Crafts & DIY Projects | Mar 25, 2020

Make Your Own Can Planters

Outdoors & Gardening | Jul 8, 2021

Tips for Redesigning Your Patio Space

Health | Feb 17, 2020

Trash vs. Recycle: Do You Know When to Trash it?

Buying & Selling | Dec 14, 2017

House Selling Checklist

home office with white furniture
Health | Mar 30, 2020

Everyone Is Working From Home—Here’s How to Do It Effectively

spring-cleaning-countdown
Cleaning | Mar 23, 2021

Spring Cleaning Countdown

decorating-basics
Interior Design | Jun 9, 2020

These Tips Are Your North Star For Home Decorating

Share on Social Media

Our mission is to deliver entertainment that inspires and motivates our readers, encouraging them to follow their passions as they explore new horizons.

© 2022 American Lifestyle Magazine

General
  • About the Magazine
  • Advertise
  • Copyright
  • Privacy Policy
  • Cookie Policy
  • Careers
Editorial
  • Editorial Calendar
  • Issue Archive
  • Contact Us
  • Pitch an Idea
Categories
  • Home
  • Decor
  • Real Estate
  • Life & Culture
  • Food & Recipes
  • Holiday & Entertaining
Follow Us
Facebook Pinterest Instagram Youtube

Customize this content for your business!

Learn More

,