Are you a seller? Why a pre-approved buyer is stronger than a pre-qualified buyer.
Are you a buyer? Why being pre-approved will give you more leverage with sellers.
- Pre-Approved means that the buyer has completed a full application, verification and credit process with a mortgage lender. Therefore, their lender has committed to fund that buyer up to a specific amount.
- Pre-Qualified means that though the buyer has provided the lender with enough financial information for them to make a determination that they can afford a home within a certain range, they have not verified that information or made any commitment to fund the buyer for any specific amount.
Simply reading the definitions above should make it clear that whether you’re the buyer or the seller, working as or with pre-approved status provides a stronger edge in the marketplace. As a buyer, you can negotiate with confidence and strength with a seller, even outbidding others who might be offering more money but don’t have a mortgage commitment. You know exactly what you can afford and your seller knows your financing is secured. As a seller, you can feel comfortable accepting a pre-approved buyer’s offer and taking your home off the active market because you eliminate the worry that they won’t get financed.
The bottom line is this. If you’re buying a home, taking the time to get pre-approved instead of pre-qualified could make the difference between moving into your dream home or watching someone else call it their own. If you’re selling a home, choosing a pre-approved vs pre-qualified buyer will minimize your stress and maximize your opportunity to move to a smooth closing.