Unless you're planning to buy your next home in cold hard cash, you'll need to get a mortgage from a lender in order to come up with the funds needed to close the purchase.

There are essentially two types of approvals, commonly called a Pre-Qualification OR Pre-Approval.

Pre-Qualification is typically the first step that will give you an idea of the amount you can borrow and the different types of loan programs you'll qualify for.

This is usually based on the data you submit to the lender and isn't verified with any documents or credit check.  Therefore, it's more information for you, the borrower, and acts as a decision point for your home-buying plans.

If, based on the pre-qualification, you decide that you are going to proceed with buying a home, you'll take the next step which is getting Pre-Approved.

Pre-Approval differs from the Pre-Qualification since you'll need to complete a full mortgage application, provide your pay stubs/tax returns, and the lender will run a credit check.

This is where the rubber meets the road and you'll know exactly what you can qualify for, as well as, any potential items you need to address before you can get a loan.

This process is also referred to as a "fully underwritten" pre-approval, meaning, the lender has received all your documents and reviewed them to ensure they meet their lending requirements.

So, there you have it folks, the first step in buying a home is figuring out how much loan you can qualify for. This amount, plus the cash you have on-hand for a down payment, will be your maximum buying power.

If you have any questions or want to see how much you can be approved for, send us a message or head to the link in our bio ☺️ we work with the top lenders in our local market and across the country!