Prequalification or Preapproval: What Minnesota Homebuyers Need to Know for Minnesota Buyers

Prequalification or Preapproval: What Minnesota Homebuyers Need to Know

When you start thinking about buying a home, you’ll hear two words a lot: prequalification and preapproval. They sound alike but they are very different.

Understanding the difference will help you get ready to buy a home in Minnesota — and make sure sellers take you seriously.

What is Prequalification?

Prequalification is a marketing strategy. Ever get those credit card offers that say you’re prequalified for X amount of money? That’s because it’s a marketing strategy to get you to call.

When someone calls and asks for a prequalification, they are really asking for a pre approval, that’s what they want and need in order to put an offer on a house.

What is Preapproval?

On a pre approval, you’ll fill out an application and discuss income, assets, job, credit, etc. then following up with documentation such as.

• Pay stubs
  

• Bank statements
  

• W2’s and/or Tax Returns

The lender checks your credit and runs the numbers. After this review, the lender gives you a letter saying you are preapproved for a loan up to a certain amount.

This letter shows sellers you are serious and ready to buy. Make sure your Mortgage Loan Officer is licensed and has a NMLS #.

Which One Should You Get?

If you’re just dreaming, prequalification is fine. But if you are ready to shop for homes in Minnesota, preapproval is the way to go.

• Prequalification: Quick check but not serious.
  

• Preapproval: Strong approval. Helps you win in a competitive market.

Why Preapproval Matters in Minnesota

Right now, homes in many Minnesota areas sell fast. Sellers often get more than one offer. A buyer with a preapproval letter looks stronger than one without.

With preapproval, you know your budget, and sellers know you can buy.

How ESM Makes It Simple

At Equity Source Mortgage, we guide you step by step. We make sure you know:

• How much home you can afford
  

• Which loan programs fit you best
  

• What documents you’ll need

You’ll walk away with a clear preapproval letter and confidence to shop.

Final Thoughts

Prequalification is a nice marketing tactic but Preapproval is the real key to unlocking your home search.

Ready to get preapproved for a Minnesota home loan?
Start your preapproval with Equity Source Mortgage today.