There’s a lot to learn when you’re starting to look to buy a home in St. George and surrounding areas. From things like earnest money to closing costs, it’s a lot to take in during a very short period that your Realtor will help you with. But here is one topic you need to know, understanding the difference between being pre-qualified and pre-approved for your mortgage.

Why Your Mortgage Application Status Matters

It is vital to bring to the table a strong offer in Southern Utah, including the Cities of St. George, Santa Clara, Washington and Hurricane, as the market is short on inventory and long on buyers. If you’re in a multiple offer situation (and even if you’re not), the sellers are going to weigh the various offers they receive to decide which offer is strongest to get their home sold quickly.

A strong offer is one with the least obstacles. For example, if you need to sell your house before you can close on the one, you’re making an offer on, this might be considered a weak offer for some sellers. A weak offer doesn’t mean a bad offer, necessarily; it’s simply an offer that looks like it could be tricky to actually get to the closing table. The risk versus reward is too high. This is why having the right kind of mortgage application status plays in your favor when it comes to negotiation.

Mortgage Pre-Qualification Versus Mortgage Pre-Approval

When you meet with a lender for the first time, such as Academy Mortgage in St. George, UT, they generally ask some probing questions about your income and assets, as well as your expenses and credit. They’re not just being nosy; that lender is trying to help figure out just how much home you can qualify for and what programs might be best for your financial picture.

Pre-qualification goes largely by your word about your income and expenses and is not a promise to lend. It’s simply a hypothetical among a list of hypotheticals. If you do in fact make this much money, your credit is as assumed, the house you choose lines up with these guidelines, and rates don’t change dramatically, you should be able to buy this much house. You can see how that would be a bit dodgy for a seller to hang all their hopes on.

A pre-approval, on the other hand, shows that you’ve gone through the additional steps to reach the highest level of mortgage approval you can get without actually having a house secured (the house you choose also figures into the final approval, but just how it figures depends on the loan program). For a pre-approval, you’ll need to provide income documents, permission for the lender to pull a full credit report, and details on any assets or liabilities you hold that aren’t included in your credit.

A pre-approval isn’t instant; it requires more review, and you’ll need to choose a lending program to be approved for. However, doing all this extra work shows potential sellers that you’re already putting in a lot of effort to ensure you can actually close when the day comes, and that you’re eager to move the process along as quickly as possible. That’s the kind of buyer a seller wants to see! Please let us know if you’re looking to buy or sell a home in Southern Utah. Or, if you’re not quite ready, let us help you rent a home in Saint George until you’re ready to buy!

Jerry Jensen

Jensen Property Management & Leasing