if i get prequalified (or is it preapproved?), do i basically have the okay to go and spend a certain amount? would the advantage to that be that i can close quicker?
A pre qual is giving a brief verbal interview to a mortgage rep including your employment/income type and longevity, debt and credit scenario and proposed down payment and the rep in turn determines your affordabilty index and gives you a dollar amount range for you to consider in your house hunting. A pre approval, however involves a complete interview and a 1003 mortgage application including observation of and verification of your declarations and most documents. A pre approval is what realtors or FSBOS will want to see before showing you properties or giving you listings because it demonstrates that your qualifications have been observed and you have been determined to be mortgage-ready.
Prequalified means squat and pre-approved only just a little more (IMO). In hotter markets, most sellers will not even entertain an offer without a pre-approval letter from the lender. Yes, it cuts down on the contract-to-actual close time but it also gives the seller a better feeling that he/she may actually get to the table without the deal falling apart because of financing.
Keith
That was excellent, Keith. I loved the term “squat”, because that’s EXACTLY what it means. Good job!
Da Wiz
thanks for the responses guys