When you’re thinking about buying a home in Nashville, Franklin, Brentwood or any of the surrounding communities, you’ll probably need to talk to a lender about getting a mortgage.
However, simply talking to a lender doesn’t mean that you’ll qualify to buy a home.
In fact, the process can be a bit complicated – so here’s what you need to know.
What is Prequalification?
Loan prequalification is a process that only requires you to talk to a lender, mortgage broker or bank about your current financial circumstances. You’ll discuss your credit, your income and your assets, as well as your debts.
The lender will not run a credit check on you during a prequalification. However, the lender will tell you how much you may be able to qualify to receive if you decide to apply for a loan with that institution.
What is Preapproval?
Loan preapproval is a much more in-depth process than prequalification is. You’ll still talk to a lender about your financial circumstances, but this time, the lender will read a credit check on you to find out whether you meet the criteria for a loan from that institution. The lender will also verify your income and assets, and the result is an official preapproval for a loan.
What’s Best – Prequalification or Preapproval?
Conventional wisdom says that it’s best to get preapproval from a lender before you even begin house hunting. If you are prequalified, you’ll have a good idea about how much you can afford… but if you’re preapproved, sellers are more likely to take your offers seriously because they know you’ll be able to follow through.
Are You Looking for a Home in Williamson County or Davidson County?
If you’re looking for a new home in Williamson County or Davidson County, we can help. Call 615-473-5973 or get in touch with us online. We’ll begin a custom search just for you.
