Mortgage Prequalification vs. Mortgage Application
At Dream First Bank, we understand that buying a home is a significant financial decision for any potential homeowner, and we strive to provide customers with top-notch mortgage solutions to fit your personal financial needs. Dream First Bank is proud to offer a prequalification process for our clients that can help you determine your eligibility for a mortgage and help you on the path to applying for one. Here are a few things you should know about the differences between a mortgage prequalification and a mortgage application, highlighting the advantages of prequalification to help you turn your dream home into a reality.
What is Mortgage Prequalification?
For many, this would be the initial, and possibly the most vital step in the homebuying process that helps you to determine your qualification for borrowing from a lender. One of the key features of a prequalification is that it involves a soft credit pull assessment. This will allow you to determine your eligibility from a credit standpoint and, because it is a soft pull, you won’t have to worry about it negatively impacting your credit score. In addition, a prequalification provides you with an estimate of the loan amount you may qualify for, helping you set a realistic budget and narrowing down your property search. It enables you to understand how much you can comfortably afford, including your potential new mortgage payment. Submitting your financial information for prequalification with Dream First Bank can be a safe and easy way to determine your eligibility before you formally apply for a mortgage.
Applying for a Mortgage
Once you’ve completed the prequalification process and are ready to move forward with your home purchase, the next step is applying for a mortgage. The mortgage application is where the important parts of the mortgage process begin, requiring lenders to complete a comprehensive credit analysis of your creditworthiness including the evaluation of your income, assets, employment history, credit history and other relevant financial information. Notably, the mortgage application process will require lenders to make a hard pull on your credit, potentially impacting your credit score as a result.
After submitting your application, your lender will perform a comprehensive credit analysis, and look at the documentation you provided and any notable information within your credit history. If all goes well, you should receive a formal loan offer from your lender. This will detail the terms of the loan, the conditions for upholding the loan and repayment of your mortgage.
Make the Mortgage Process Easy with Dream First Bank
If you’d like to take the next step and turn your dream of being a homeowner into a reality, Dream First Bank is here to help you achieve it. Prequalification is an important step to start your homebuying process and Dream First Bank offers a variety of services to help you with your mortgage. Contact us today to learn more about how to make your home ownership dream come true with Dream First Bank!