The Difference Between a Pre-Qualification vs. Pre- Approval

The Difference Between a Pre-Qualification vs. Pre- Approval

There is plenty of real estate terms used in transactions. Needless-to-say it can be confusing

for both buyers and sellers trying to navigate the process. The home loan process might feel

overwhelming and difficult to understand. Both buyers and sellers find terms like “Pre-

Qualification” and “Pre-Approval” used interchangeably, it’s no wonder they find themselves

wondering how to proceed.

Pre-Qualification

The first step in obtaining a home loan is to meet with a lender and discussing their financial

situation. The lender will discuss income, job stability, debt and credit. Once they have

performed a basic review of the qualifications and run credit, they will issue a Pre-Qualification

Letter to the potential buyer. This letter will identify the maximum sales price, down payment

requirement and basic terms of the loan, such as interest rate.

The Pre-Qualification letter is used to provide evidence that the buyer has been reviewed by a

lender who is vouching for their ability to obtain a loan.

Pre-Approval

A Pre-Approval is quite different. In this case, the lender collects all the necessary information

and proof of eligibility and has it reviewed by the lender underwriter for approval. A Pre-

Approval letter is almost like shopping with cash, the only remaining piece of the puzzle is the

property they are buying. 

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The Worst Mistakes You Can Make As a Homebuyer By Celina Vazquez

The Worst Mistakes You Can Make As a Homebuyer By Celina Vazquez

Buying a home is typically the largest financial transaction most people make in their lifetime. The last thing you want to do is make a mistake, one which could cost you time and money – often a lot of money. These are some of the most common, and worst, mistakes you can make when buying a home. 

• Not doing your homework in advance – Before you do anything else, do some preliminary research and get a pre-qualification letter before you start shopping for your new home.

• Changing Jobs or Buying Big Items – Once you’ve decided to buy a home, it’s critical not to change your circumstances, such as a new job or large credit card purchase. 

• Calling the Listing Agent Directly – It might be tempting to try and get a “better deal” by working with the listing agent rather than using your own agent. This is not true; the listing agent works for the seller and does not represent your interests. 

• Accepting Everything at Face Value – Always ask questions and investigate everything, including getting a thorough home inspection. Buying a home is exciting, but the most important thing is to consider the details and think everything through before jumping. By understanding some of the mistakes buyers make, you can avoid them. 

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Build Your New Home or Buy A Resale? 

Who hasn’t dreamed of building their dream home from scratch? From the perfectly designed kitchen to the expansive master bedroom suite, it’s an appealing idea to create the perfect home for you and your family. But is building a new home really the right decision for you? There are benefits and drawbacks for both new construction and buying a resale home. 

Building a New Home 

The biggest advantage of building a home is that everything is new. While you envision everything perfectly, that’s not always feasible. Building codes, lot restrictions and financial limitations could cause you to compromise more than you’ hoped. There are also construction delays and unexpected costs to consider.

Resale Home 

A resale home might not have everything you want, but it could provide a great value. With careful thought, a resale might only require minor renovations to suit your taste. Much of the expensive work has already been done, such as landscaping. However, the remodeling costs could be considerable if the home is very outdated and this could be out-of-pocket cost. Both new construction and resales homes have benefits. If you are in the market for a new home, consider the options in your area and compare real costs and benefits. Knowing the difference can save you money and help you find the right home for your needs and lifestyle.

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Lowes Home Renovation Upskill Project Contest

Lowes Home Renovation Upskill Project Contest Riverside County

Lowes Home Renovation Upskill Project Contest Riverside County - Hey Neighbors in the Riverside County Area. As your neighborhood Real Estate Agent i am addicted to houses and renovation and I just found a great opportunity for a home renovation. Lowes is hosting a Home Renovation Contest and all who live in the Riverside County Area are eligible to enter. Enter a video submission and fill out the application in the link here at LOWES UPSKILL PROJECT. You must be 18 years or older and submit a video showing the skills you want to learn in home renovation, the space you would like to renovate and  why its important to you. Consider smaller projects that have a big impact: painting, tiling, building, shelves, landscaping of flower beds, etc. 

What You Can Win

• $2,000 Lowe's Gift Card

5 people will be chosen for the grand prize and will recieve a $2,000 Lowe's gift card to use in             their home renovation project

• Design Consultation Services 

Winners will also receive a design consultation to help bring to life their desired project, and learn a few design skills along the way.

• Side-By-Side Instruction

To help complete the project, we'll send an experienced teacher who will teach the necessary skills and techniques over two days. All projects materials and tools within the $2,000 project budget will be purchased from a local Lowe's store.

• Community Project

To help their neighbors gain confidence, winners may be asked to participate in a community event where they'll share their newly learned project skills with others. Community events will take place in November , either at a Lowe's store or with an existing community partner.

Entry Period - Submissions must be entered by August 14th

The Details

• Video should not contain any individuals other than entrant and should not display or include any trademarked, copyrighted, or proprietary brand names, logos, images, or objects.
• Video should not include music and should be between 60 and 90 seconds
• Video must show your face, the space you want to refresh, and must explain and show exact refresh project you want to accomplish
• Recommended formats include: MPG, MPEG, FLV, AVI, MP4, MOV, 3GP, WMV, MV4

The Scoring

Lowes will review every video and narrow down the selection based on a 100 point scale.

• A maximum of 50 points for excitement and passion shown towards the project and learning new skills
• A maximum of 30 points for providing a clear ad creative description of the skills you need for the project
• A maximum of 20 points for providing a clear and creative description of why you want to improve your home

Link to the Lowes Contest Application

Link to Official Rules and Qualifying Zip Codes

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Why Pre-Approval Should Be Your First Step

In many markets across the country, the number of #buyers searching for their #dream #homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. 

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many #advantages of working with a local #real #estate #professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a #lender, you will need to fill out their loan #application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” 

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

1. Capacity: Your current and future ability to make your payments
2. Capital or cash reserves: The #money, #savings and #investments you have that can be sold quickly for cash
3. Collateral: The #home, or type of home, that you would like to #purchase
4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show #home #sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.