According to the S&P CoreLogic Case-Shiller Indices for June, home price gains are continuing to slow across much of the country, including in metro Denver, where they are starting to move in line
Looking For Homes In Denver Make Mortgage PreApproval Your First Step
So you’ve decided to start looking at homes in Denver. You may think the first step is to hop on the MLS and see what’s available, but do you even know how much house you can afford? That’s where mortgage prequalification and preapproval come in.
The terms may sound the same, but prequalification is actually just the first step. During the prequalification stage you’ll get an idea of how much of a loan you'll likely qualify for. Getting pre-qualified involves supplying a bank or lender with your overall financial picture, including your debt, income, and assets. The lender reviews everything and gives you an estimate of how much you can expect to borrow. Pre-qualification can be done over the phone or online, and there’s usually no cost involved. It’s a quick process as well, usually taking just a few days to get a pre-qualification letter.
Preapproval, on the other hand, is a conditional commitment to actually grant you the mortgage. Getting pre-approved is the next step, and it's much more involved. A pre-qualification is a good indication of creditworthiness and the ability to borrow, but a pre-approval is the definitive word.
You must complete an official mortgage application to get pre-approved, and you must supply the lender with all the necessary documentation to perform an extensive check on your financial background and current credit rating. The lender can pre-approve you for a mortgage up to a specified amount after reviewing your finances. You'll also have a better idea of the interest rate you’ll be charged on the loan at this point, because this is often based in part on your credit score, and you might even be able to lock in an interest rate. Some lenders charge an application fee for pre-approval, which can be upwards of a few hundred dollars.
While getting prequalified is a good first step, to truly understand how much house you can afford, it’s crucial to get preapproved. This step also shows buyers you’re serious, which can give you a leg up on others who are interested in the same property, but do not have their finances in order.
If you’re ready to become a homeowner in Denver, give Metrowest a shout today – we’d love to show you around!
Brent was born and raised in Colorado and enjoys all that the state has to offer. Brent is a graduate of Metropolitan State University of Denver, where he received a BS in Business Management. After ....
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