Two real estate terms you’ll most likely hear often are pre-qualification and pre-approval. Whether it’s your first time buying a home or purchasing a Miami condo as an investment, it is crucial to get to know these two real estate lingo, especially before shopping for a mortgage.
Pre-qualification
Before going about the city looking for a Miami condo, you should first know how much you can afford; and you can know that through a pre-qualification. Getting pre-qualified gives you a good enough idea of how much your lender will be able to lend you. The process of getting pre-qualified normally involves obtaining a letter from your loan officer, who reviewed all your qualifications and assessed your capability to pay monthly mortgage payments.
One of the vital factors that affect your pre-qualifying for a mortgage is your FICO score, or simply your credit score. Like in conventional home-buying, it is crucial to obtain a good, even outstanding, credit score when buying Miami condos, especially if as an investment. Generally, lenders regard 300 as low and 850 as high. Yours will be deemed average if around 620 to 660, and excellent if around 720 and above.
Pre-approval
Pre-approval, on the other hand, is a step up from pre-qualification, where you’ll receive a particular amount of mortgage sometimes attached with specific conditions. You can apply for a pre-approved mortgage by sending a letter to your lender. Your loan officer will then review your credit, assets, income and financial history.
Contrary to pre-qualification, getting pre-approved entails several benefits. For instance, once your see the condo you want, you can easily and quickly give an offer to the seller, thus improving your chances of sealing the deal fast and not end up in a bidding war against other buyers. Having a pre-approved mortgage also gives you a better view of which property you can and cannot afford, as well as those below your price range. This means that you’ll not be wasting time looking at houses either too expensive or too cheap for your buying power.
Whether you’re buying Miami condos or other residential properties, it is crucial to get pre-approved for your mortgage. This not only helps you avoid the mistake of buying homes that are either too expensive or too cheap but also makes you a serious buyer for sellers. Nowadays, most sellers won’t even bother with buyers who don’t have a pre-approval letters; so getting one will be tremendously beneficial.
Mark Michael Ferrer
Miami Condos
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