Did you know that being pre-qualified for a mortgage is not the same thing as being pre-approved?
Well, it’s not, and we’re here to tell you why you need to be pre-approved before you start shopping for your next New Orleans home.
When you have a chat with a lender and give them a broad overview of your financial situation (income, expenses, etc), they can quickly pre-qualify you and tell you about how much you’d be eligible to borrow based on the information you’ve given them. But this is before they pull your credit bureau, verify your employment, get copies of your tax returns, bank statements, and pay stubs, and actually put you through their underwriting system.
A pre-approval is what you get after your lender has verified all of the above information and approved your loan as long as you find a house that meets the lending criteria.
Why do you need to be pre-approved when home shopping?
We have, over the years, seen lots of things pop up on credit bureaus that cause mortgages to be declined or delayed while errors are corrected.
We’ve also seen folks that don’t really know how much they make and how much they owe. Student loans, even in deferment, count towards your debt. Child support does as well. Not all overtime can be included in your gross income. And that side hustle that you don’t pay taxes on? It doesn’t count at all.
The time to find out that there are problems to correct or budgets to adjust is before you find a home that you absolutely love, not afterward. Believe me, the disappointment of “the one that got away” has thrown many potential buyers off track when they realize that their budget needs to be adjusted after going through underwriting.
Need a referral?
We’re happy to connect you with one of our favorite, local lenders. Just give us a call at 504-327-5303.