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 (768)
    • Appetizers (140)
    • Breakfast (64)
    • Cooking Tips (41)
    • Desserts (219)
    • Dinner (232)
    • Drinks (59)
    • Gluten Free (9)
    • Healthy (71)
    • Lunch (11)
    • Quick & Easy (62)
    • Vegan (37)
    • Vegetarian (55)
Dinner | May 22, 2023

Scalloped Potatoes with Tomatoes and Anchovy Parsley Sauce

  • Holiday & Entertaining Categories
    • Celebrate (2)
    • Christmas (83)
    • Easter (15)
    • Entertaining (44)
    • Fall (11)
    • Father’s Day (6)
    • Halloween (29)
    • Hanukkah (17)
    • July 4th (36)
    • Mother’s Day (8)
    • New Year’s (23)
    • Spring (10)
    • St. Patrick's Day (11)
    • Summer (21)
    • Thanksgiving (36)
    • Valentine’s Day (5)
    • Winter (12)
Travel | Apr 6, 2023

Egg-citing Dishes from Around the World

  • Decor Categories
    • Crafts & DIY Projects (279)
    • Curb Appeal (6)
    • Decorate (82)
    • Interior Design (94)
Interior Design | May 26, 2023

A Modern Spanish Hacienda

Decorate | Apr 1, 2023

A Guide to Shopping Secondhand

Interior Design | Apr 1, 2023

A Modern Funk Redesign

  • Real Estate Categories
    • Buying & Selling (205)
    • Home Trends (23)
    • Staging (21)
    • Your First House (35)
Buying & Selling | May 15, 2023

America’s Best Cities

Staging | Feb 13, 2023

Put Your Best House Forward

Decor | Nov 14, 2022

Design Trends to Follow in 2023

  • Life & Culture Categories
    • Editorial (319)
    • Family & Pets (213)
    • Finances (36)
    • Health (159)
    • Travel (260)
Family & Pets | Jun 2, 2023

Picky-Eating Pets

Interior Design | May 26, 2023

A Modern Spanish Hacienda

Travel | May 26, 2023

A Surprising Way to Travel

  • Home Categories
    • Cleaning (44)
    • Organizing (48)
    • Home Improvement (125)
    • Outdoors & Gardening (91)
Outdoors & Gardening | Mar 2, 2023

Prepping Your Home for Spring

Cleaning | Feb 28, 2023

Detail Your Car like a Pro

Home Improvement | Jan 18, 2023

4-Week Home-Improvement Challenge

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.

17753 Views

This article is tagged in:

First Time Home BuyerHome BuyerHome BuyingLenderMortgageReal Estate Tips

Related Posts

Real Estate | Sep 23, 2022

How to Shop for a Home Loan

Real Estate | Sep 21, 2022

Tips for Preventing Homeowner Identity Fraud

Real Estate | Sep 19, 2022

Are Open Houses Worth It?

Real Estate | Sep 17, 2022

The Perks of Buying a Waterfront Property in Fall

must-have-phone-numbers
Real Estate | Aug 19, 2022

Must-Have Phone Numbers for Your New Home

Popular Posts

can-planters-card
Decor | Mar 25, 2020

Make Your Own Can Planters

Home | Jul 8, 2021

Tips for Redesigning Your Patio Space

Life & Culture | Feb 17, 2020

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

spring-cleaning-countdown
Home | Mar 23, 2021

Spring-Cleaning Countdown

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?

spring-cleaning-countdown
Cleaning | Mar 23, 2021

Spring-Cleaning Countdown

home office with white furniture
Health | Mar 30, 2020

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

Buying & Selling | Dec 14, 2017

House Selling Checklist

Make Your Own Seed Paper
Crafts & DIY Projects | Mar 17, 2016

Make Your Own Seed Paper

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.

© 2023 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

,