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Pre-Qualified Vs Pre-Approved
Buying a home affords the home owner a terrific financial advantage. Most buyers will take out a home mortgage. The buyer's down payment creates equity in the property that grows with each mortgage payment. Over time, the equity in the property grows and amounts to forced savings.
Once you calculate what you can afford, you might want to begin the loan process. You don't need to have a specific home in mind to do this. To find a lender, research several, and get recommendations from family and friends as well as your real estate agent.
Prequalification can usually be done fairly easily. You will provide information about your income, assets, and debts, and then get an estimate of how much you'll be able to borrow.
Prequalifying is not the same as pre-approval. Pre-approval actually involves applying for the loan, and entails an application fee. For pre-approval, you'll provide figures regarding your income, debt, and assets, along with supporting documentation, including a credit check and employment verification.
Once you're pre-approved, you may have some advantage over other buyers. A seller likes to deal with a pre-approved buyer, and may even make concessions since the sale is guaranteed and not contingent upon financing. Pre-approval for a mortgage is, of course, subject to a satisfactory property appraisal and title review.
 
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