Preapproval VS Prequalification is a decision you’ll likely face when considering a VA home loan. It’s essential to understand the differences between these two processes and why preapproval should be your go-to choice. Follow us down the rabbit hole to learn why prequalification isn’t even worth the paper it’s written on!
What is Preapproval?
Pre-approval relies on concrete data to determine how much borrowers can finance, providing a more accurate home-buying price range. This process is based on tangible financial information, including income, debt, and credit history.
What is Prequalification?
Pre-qualification is a rough estimate of how much you can borrow based on what the borrower tells the lender. Home buying price range estimates generated by pre-qualification are often inaccurate and unreliable. This process does not require proof of income, debt, or credit history, making it less credible and not recommended for homebuyers.
The Importance of Preapproval
When it comes to VA home loans, pre-approval is the way to go! This process allows borrowers to solidify their budget, negotiate with greater confidence, and close more quickly. Pre-approval indicates that underwriting has reviewed and validated your finances and credit history, giving you a green light to move forward in the home-buying process.
4 Simple Steps to Preapproval
- Apply: Complete a 10-minute application to get started.
- Check the Box: Review the checklist provided by your lender outlining the documents you need for a pre-approval letter.
- Verify: Underwriting will review and validate your finances and credit history.
- Pre-Approval: Once approved, your loan officer will issue your pre-approval letter/package.
Preapproval VS Prequalification Summary
Conclusion: Pre-approval is the recommended path for VA home loan borrowers, offering a more reliable and accurate estimate of your borrowing capacity. Pre-qualification, on the other hand, is less credible and can lead to disappointment and wasted time.
Still, have questions about VA home loan requirements? Reach out to our VA Home Loan Specialists on our Website. We’re here to help our veterans and military families navigate the home-buying process with ease.
