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.
Purchasing a home is one of life’s most exciting milestones. However navigating the mortgage process can seem daunting especially for first-time homebuyers. That’s where getting preapproved by a trusted lender like Quicken Loans can help.
In this comprehensive guide, I’ll walk you through everything you need to know about getting preapproved with Quicken Loans. Whether you’re just starting your home search or are ready to submit an offer, understanding the preapproval process is key to making your homeownership dreams a reality.
What is Preapproval and Why Does it Matter?
Simply put, preapproval is a preliminary approval from a lender indicating you meet their requirements to qualify for a mortgage loan up to a certain amount. This preapproval letter gives you a price range to focus your home search on. It also shows sellers you’re a serious, qualified buyer so your offers carry more weight.
The preapproval process involves submitting financial documents so the lender can analyze your credit, income, employment, assets, and debts. After review, the lender provides a preapproval letter estimating the maximum home loan amount you can qualify for.
Getting preapproved early in your home search brings many benefits
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Know your budget. Preapproval gives you a clear sense of your affordable price range. This helps you zero in on homes you can comfortably afford.
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Stronger negotiating power. Preapproval letters assure sellers you can secure financing, giving you a competitive edge.
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Faster closing. Much of the paperwork is finished upfront, helping streamline the mortgage process later on.
Bottom line, preapproval should be one of the first steps any homebuyer takes.
How Does Quicken Loans’ Preapproval Process Work?
Now that you know why preapproval matters, let’s look at how Quicken Loans handles preapproval specifically. Their streamlined process makes getting approved simple and straightforward.
Step 1: Submit Your Application Online
Quicken Loans offers an easy online application you can complete on your phone, tablet, or computer in under 10 minutes. You’ll enter details on:
- Income and employment
- Assets and spending habits
- Credit scores and debts
- Down payment funds
- Property and loan details
Quicken Loans’ digital tools even let you securely link financial accounts to automatically verify assets. This expedites the process.
Step 2: Provide Supporting Documentation
After starting your application, a Quicken Loans mortgage banker will request documentation to verify your details. This includes pay stubs, tax returns, bank statements, and other fiscal records.
You can easily upload documents directly through their website or mobile app. Quicken Loans also integrates with digital services like DocuSign to streamline signing and submitting forms.
Step 3: Get Preapproved!
Once Quicken Loans reviews your information, an underwriter will analyze your financial profile and qualifications. If approved, you’ll receive a preapproval letter outlining the maximum mortgage amount and terms you qualify for based on your unique situation.
Rates are also locked in for 90 days with Quicken Loans’ RateShield approval, protecting you from rate hikes while house hunting. All in all, you can get fully preapproved in as little as 24 hours with Quicken Loans’ fast digital process.
What Do You Need to Get Preapproved with Quicken Loans?
To set you up for preapproval success, here are the key items Quicken Loans looks for:
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Credit score: The higher your scores, the better. Aim for at least 620.
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Down payment: Typically 3-20% of the purchase price depending on loan type.
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Income and employment: Steady income and 2+ years in your field are ideal.
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Monthly debts: Your debt-to-income ratio should be below 50% for approval.
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Assets and reserves: Money in your accounts to cover down payment and closing costs.
Having these ducks in a row proves you’re financially ready to take on a mortgage, boosting your preapproval chances.
What Loan Options Can You Get Preapproved For?
Quicken Loans offers preapproval for a variety of mortgage products to fit different budgets and needs, including:
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Conventional loans: Competitive interest rates and standard eligibility requirements. Down payments as low as 3%.
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FHA loans: Allow down payments as low as 3.5% and are more lenient on credit and debt ratios.
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VA loans: Offer 0% down payment options for qualifying military members and veterans.
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Jumbo loans: Ideal for luxury properties or high cost-of-living areas.
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Adjustable-rate mortgages (ARMs): Start with lower interest rates that eventually adjust up. Helpful when planning to move before the ARM period ends.
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Unique programs: Special mortgages like Home Possible®, HomeOne®, and HomeReady® to assist eligible buyers.
With an array of mortgage products at your fingertips, Quicken Loans has an option to finance virtually any home purchase scenario.
When Should You Get Preapproved?
Timing is key when it comes to preapproval. I recommend starting the process 3-6 months before you plan to buy.
Securing preapproval too early means it could expire before you find a home you want to buy. But leaving preapproval until the last minute can weaken your negotiating position and create headaches during the home stretch.
The ideal preapproval timeline looks like:
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Month 1: Review your finances and credit. Start gathering needed documents.
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Months 2-3: Apply for preapproval with Quicken Loans. Shop for lenders and compare mortgage offers if needed.
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Months 3-6: With your preapproval letter in hand, start actively touring homes within your approved price range.
This ensures you have all the advantages preapproval provides exactly when you need them most in your home search.
5 Benefits of Getting Preapproved with Quicken Loans
I’ve helped many first-time homebuyers navigate getting preapproved with Quicken Loans over the years. Here are five key perks they consistently enjoy:
1. An easy online process – Quicken Loans’ digital tools make getting approved simple, fast, and convenient. You can even use their mobile app to complete the process on the go.
2. Fast turnaround – Preapprovals take as little as 24 hours in some cases. Quicken Loans’ tech-driven process really streamlines operations.
3. The mortgage rate guarantee – RateShield approval locks in your interest rate for 90 days while house hunting, protecting you from hikes.
4. Stellar service – A personal mortgage banker guides you through every step. Quicken Loans earns high marks for support.
5. Buying power – Preapproval puts you in a strong position to make competitive offers and stand out to sellers.
By preapproving with an experienced lender like Quicken Loans early on, you’ll have the financing certainty and confidence needed to turn your homeownership aspirations into reality.
Ready for Preapproval? 5 Tips to Get Started
If you’re ready to get the preapproval ball rolling, here are five tips to prep:
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Check your credit scores – Aim to improve any issues before applying. This can help land better rates.
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Gather must-have documents – Having paystubs, tax returns, and bank records handy saves time.
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Know your budget – Consider factors like commute, schools, and future plans when setting your target price range.
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** Shop lenders** – Compare mortgage rates and fees to ensure you get the best deal.
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Make a plan – Have a timeline for when you’ll apply and start touring homes.
With preparation and a trusted partner like Quicken Loans, the path to homeownership through preapproval is clear, straight-forward, and even exciting!
Homeownership Awaits! Let’s Recap
Finding and financing your dream home starts with getting preapproved. As we’ve discussed:
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Preapproval indicates you’re qualified for a target mortgage amount. This drives an effective home search.
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Quicken Loans offers a fast online process you can complete in just minutes or hours.
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Checking credit, providing documents, and assessing finances prepares you for preapproval.
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A wide range of mortgage products are available to finance different needs.
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Strategic timing ensures your preapproval aligns with your homebuying timeline.
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Perks like rate locks provide homebuyers value and peace of mind.
Still have questions? Quicken Loans has over 25 years of mortgage expertise and is ready to guide you on your journey to homeownership. Let’s connect! With preapproval power on your side, your dreams can soon become reality.
Prequalified Vs. Preapproved FAQs
Itâs easy to confuse prequalification with preapproval since there are many similarities between the two. The information in the following frequently asked questions may help you understand the differences better.
Whatâs The Difference Between Preapproved And Prequalified?
Most home buyers confuse preapproval and prequalification since the terms are similar in many ways. In both cases, your lender will review your finances and estimate the type of mortgage and amount you can afford.
The main difference between prequalified vs. preapproved is that prequalification means your lender believes you will qualify for a loan based on your credit score and self-reported financial information. Itâs a more general estimate of your expected loan amount using minimal information.
But to get preapproved for a mortgage, you have to submit documents for your lender to review, like W-2s, pay stubs, tax returns and bank statements. Your lender will also make a hard inquiry on your credit before giving you a preapproval letter. For that reason, a preapproval is more accurate than getting prequalified.
Getting prequalified means your lender has done a basic review of your finances, and itâs an essential first step when buying a house. During the prequalification process, your lender will ask for the following information:
- Credit score
- Income
- Assets
- Debt
- Revolving creditÂ
Prequalification is faster and less accurate since youâre providing the information yourself. The only information your lender will verify is your credit score.
Getting preapproved is a more thorough undertaking and is the next step in the home buying process. Borrowers need to provide the following financial information and documentation to get preapproved:
- Pay stubs
- Tax returns
- Bank statements
- Personal identification
- More details about your assets and debtsÂ
If your lender reviews your financial information and determines youâre a good candidate for a mortgage, theyâll send you a preapproval letter. This letter is a document stating that the lender is tentatively willing to lend you up to a certain amount of money to buy a home.
How long is Quicken Loans pre approval good for?
FAQ
Is Quicken Loans easy to get approved?
What credit score is needed for Quicken Loans?
How long is Quicken Loans pre approval good for?
Does Quicken Loans do soft pulls?
Does a mortgage preapproval require a credit check?
A mortgage preapproval requires a hard credit check so your lender can see your credit score and other debt. These might include bank statements and pay stubs. Typically, you can apply for both a mortgage preapproval and a mortgage prequalification online. A preapproval is helpful when you’re shopping for a home.
Is Quicken Loans a Rocket Mortgage®?
At one time, Quicken Loans called its digital platform, “Rocket Mortgage®.” Rocket Mortgage® took off so dramatically that it didn’t take long for the names Quicken Loans and Rocket Mortgage® to be used interchangeably.
How do I get a home loan preapproval?
To get a home loan preapproval, first apply online for expert recommendations with real interest rates and payments. You need to verify your financial information and obtain a loan estimate as part of the mortgage preapproval process. Let’s walk through each step and review the parts you’ll be responsible for: 1. Collect Your Documentation
Why did Quicken Loans change its name to Rocket Mortgage®?
Rocket Mortgage® took off so dramatically that it didn’t take long for the names Quicken Loans and Rocket Mortgage® to be used interchangeably. Finally, saying that “Rocket” was the word that best described the services it offers, Quicken Loans officially changed its name to Rocket Mortgage®. Rocket Mortgage® has a lot to offer.