Though the terms are often used interchangeably, prequalification and preapproval are two different steps you take when applying for a mortgage. During the prequalification stage, lenders will do a basic review of your finances and credit to see if youâre ready for a mortgage.
In comparison, getting preapproved involves a more thorough review of your financial situation. Itâs a good idea to learn how getting prequalified vs. preapproved works, the differences between the two and when each step makes sense.
Preapproval is a crucial first step for any prospective homebuyer It gives you an estimate of how much home you can afford and demonstrates to sellers that you’re a serious buyer Quicken Loans, one of the nation’s top mortgage lenders, offers a streamlined path to preapproval. In this guide, we’ll walk you through everything you need to know about getting preapproved with Quicken Loans.
What Is Mortgage Preapproval?
Preapproval refers to the process of determining the maximum mortgage amount you can qualify for based on your finances. Quicken Loans will assess factors like your income employment, assets credit score and debts to estimate the loan size you can take on.
While preapproval doesn’t guarantee final mortgage approval, it indicates you’re creditworthy. And it’s a necessary step for securing a competitive bid on your dream home.
The Benefits Of Preapproval
Here are some key advantages preapproval offers:
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Gives you a price range for your home search so you can focus on affordable listings.
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Shows sellers you’re financially ready to move forward. Preapproval makes your offer more attractive.
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Streamlines the process once your bid is accepted, since you already have conditional approval.
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Locks in current interest rates for a set period. Rates fluctuate, so this protects you from hikes.
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Provides insight into the total fees and closing costs you can expect.
How To Get Preapproved With Quicken Loans
Now let’s walk through the step-by-step process to gain preapproval with Quicken Loans, one of the top lenders in the nation.
1. Submit your application online
You can conveniently start your preapproval process digitally. Simply visit Quicken Loans online or use their mobile app to begin. You’ll input details like:
- Your desired loan amount
- The property type and location
- Your estimated credit score range
- Your contact info and Social Security Number
This takes just a few minutes and you can even save your progress if you need to finish later.
2. Gather supporting documents
To verify your financial qualifications, Quicken Loans will need to review supporting evidence. Be ready to provide:
- Federal tax returns for the last 1-2 years
- W-2s documenting your income
- Pay stubs covering the last 30 days
- Bank statements showing assets
- A photo ID like a driver’s license
- Other debts and financial obligations
Having these ready to upload will help accelerate the process.
3. Authorize Quicken Loans to access your credit
A credit check is required for preapproval, so you’ll need to authorize Quicken Loans to access your credit reports.
This allows them to review your score, which influences the loan amount and interest rate you qualify for. Multiple hard credit inquiries in a short span only count as one, so shopping lenders won’t hurt your score.
4. Get your preapproval letter
Within 1-2 business days after reviewing your application and documents, Quicken Loans will issue a preapproval letter if approved.
This letter outlines important terms like:
- The maximum loan amount you qualify for
- Your projected interest rate
- Estimated monthly payment
- Loan program eligibility
- Expiration date of the preapproval
Rates are locked for 90 days. The letter also provides confidence to sellers that you can obtain financing.
5. Start searching for your dream home!
With your preapproval letter in hand, you can start hunting for listings in your approved price range. Quicken Loans also offers a real estate service to help match you with an agent.
When you find the perfect home and make an offer, notify your loan officer. They will guide you through final approval and closing!
Tips For A Smooth Preapproval Process
Here are some tips to ensure the preapproval process with Quicken Loans goes smoothly:
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Time it right: Apply when you’re ready to buy, so the preapproval aligns with your search. It’s typically valid for 60-90 days.
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Have a down payment: Larger down payments get you better rates and increase eligibility for certain loans. Save early!
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Boost your credit score: Take steps like paying down debts and disputing errors before applying. Every point matters.
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Limit hard inquiries: Each mortgage application causes an inquiry. Avoid too many lenders checking in a short time.
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Watch financial moves: Major purchases, job changes or new debts before closing could complicate approval, so consult your lender.
Alternatives To Full Preapproval
If you’re not quite ready for full preapproval, Quicken Loans offers alternatives:
Prequalification
Prequalification is a soft credit check and requires less documentation. It provides an initial estimate but isn’t a firm commitment letter.
Rate check
Simply enter a few details to see real rate quotes from Quicken Loans with no credit checks or paperwork. Useful for estimating payments.
Both let you get ballpark figures without full commitment when you’re in earlier stages.
Common Preapproval Myths
Some common misconceptions about the preapproval process:
Myth: Preapproval guarantees I’ll get the mortgage.
Fact: Final approval depends on appraisal, underwriting and your finances not changing. But preapproval indicates you qualify based on information at that time.
Myth: Preapproval locks in my rate.
Fact: Rates are only locked for the period specified, usually 60-90 days. After that, they can fluctuate.
Myth: Applying with multiple lenders hurts my credit score.
Fact: As long as mortgage shopping happens in a short window, multiple inquiries only count as one.
Myth: Preapproval is only necessary on competitive bids.
Fact: Even in slower markets, preapproval makes the process easier and faster. Come prepared.
The Bottom Line
Preapproval is your green light to start hunting for your perfect home. With one of the top lenders in America, Quicken Loans offers an easy preapproval process you can begin online in minutes. They’ll guide you through every step, ensuring you know precisely what you can afford.
So when you’re ready, start your preapproval journey with Quicken Loans. Then enjoy searching for listings with confidence and make an offer equipped with the buying power to back it up.
Related Articles:
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How Long Does It Take to Get Preapproved for a Mortgage?
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5 Benefits of Getting Preapproved for a Mortgage
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How Much Does It Cost to Get Preapproved for a Mortgage?
Am I required to get prequalified and preapproved?
Youâre not required to get prequalified or preapproved before you start looking at houses. But skipping these steps will most likely hurt your efforts to buy a home. Getting prequalified and preapproved shows sellers that youâre financially ready to buy a house.
If you havenât gotten prequalified or preapproved, real estate agents and lenders donât know whether you can afford to buy a house or not. And most sellers wonât take your offer seriously if you havenât received a preapproval letter.
Does prequalified mean preapproved?
There are similarities between getting prequalified and preapproved, but they arenât the same thing. Getting prequalified means your lender has reviewed the financial information you reported and believes youâre likely to qualify for a mortgage.
During the preapproval stage, your lender verifies the information youâve provided. So getting preapproved for a mortgage carries more weight with sellers than prequalification alone.
How long is Quicken Loans pre approval good for?
Does a mortgage preapproval require a credit check?
These might include bank statements and pay stubs. A preapproval will also require a hard credit check so your lender can see your credit score and other debt. Typically, you can apply for both a mortgage preapproval and a mortgage prequalification online. Home Loan Preapproval Vs. Approval A preapproval is helpful when you’re shopping for a home.
Why should I get preapproved for a mortgage?
Getting preapproved for a mortgage is a crucial step in the home buying journey. It’s like the green light from a lender, showing you the amount you can qualify for before diving into the formal mortgage application process.
What is a mortgage preapproval?
Mortgage preapproval is the process of determining how much money you can borrow to buy a home. During the mortgage preapproval process, lenders like Rocket Mortgage® look at your income, assets and credit score. This information determines what loans you could be approved for, how much you can borrow and what your interest rate might be.
How do I get a mortgage preapproval?
Collect Your Documentation The mortgage preapproval process is essentially a mortgage application. This means your lender or loan officer will want to take a comprehensive look at your finances and debt-to-income ratio (DTI). You should be prepared to provide information on the following: