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Smart buyers do their
homework.
They estimate a price range for
a house before they shop.
You can do this with a mortgage
prequalification or a
preapproval.
A free mortgage prequalification
lets you know roughly how much
you can borrow, based on basic
financial data you provide.
There is no fee or obligation
and no credit check involved.
A pre-approval involves a more
detailed look at your data and
is based on a preliminary review
of your credit information.
It tells a real estate agent and
seller that you've been
preapproved for a specific loan
amount.
With a preapproval, there may be
a fee for the cost of the credit
check.
Because it is based on more
detailed information and an
actual credit check, a
preapproval has greater benefits
than a prequalification.
With a preapproval, you'll be
able to shop confidently because
you have an estimate of how much
you may be able to borrow, and
your real estate agent will know
your approximate price range to
search.
Getting preapproved or
prequalified can help you
estimate your price range.
However, it's important to
remember that neither one is a
commitment to lend.