If you’re a first-time homebuyer, odds are you’ve thrown the words “prequalified” and “preapproved” interchangeably. However, when it comes to home loans, there are some very important differences between the two.

For buyers hoping to purchase a home with a few missteps and misunderstandings as possible, it’s vital to understand the procedures involved in acquiring financing for a home.

Today, we’ll break down these two real estate jargon terms so that you can go into the mortgage approval process armed with the knowledge to help you succeed in securing a home loan.

Mortgage prequalification

Let’s start with the easy part–mortgage prequalification. Getting prequalified helps borrowers find out what kind and what size mortgage they can likely secure financing for. It also helps lenders establish a relationship with potential customers, which is why you will often see so many ads for mortgage prequalification around the web.

Prequalification is a relatively simple process. You’ll be asked to provide an overview of your finances, which your lender will plug into a formula and then report back to you whether or not you’re likely to get approved based on your current circumstances.

The lender will ask you for general information about your income, assets, debt, and credit. You won’t need to provide exact documents for these things at this phase in the process, since you have not yet technically applied for a mortgage.

Prequalification exists to give you a broad picture of what you can expect. You can use this information to plan for the future, or you can seek out other lenders for a second opinion. But, before you start shopping for homes, you’ll want to make sure you’re preapproved, not prequalified.

Mortgage preapproval

After you’ve prequalified, you can start thinking about preapproval. If you’re serious about buying a home in the near future, getting preapproved will simplify your buying process. It will also make sellers more likely to take you seriously, since you already have your financing partially secured.

Mortgage preapproval requires you to provide the lender with income documentation. They will also perform a credit inquiry to receive your FICO score.

Mortgage applications and credit scores

Before we talk about the rest of the preapproval process, we need to address one common issue that buyers face when applying for a mortgage. There are two types of credit inquiries that lenders can perform to view your credit history–hard inquiries and soft inquiries.

A soft inquiry won’t affect your credit score. But a hard inquiry can lower your score by a few points for a period of 1 to 2 months. So, when getting preapproved, you should expect your credit score to drop temporarily.

After preapproval

Once you’re preapproved for a mortgage, you can safely begin looking at homes. If you decide to make an offer on a home and your offer is accepted, your preapproval will make it easier to move forward in closing on the home.

Once the lender checks off on the house you’re making an offer on, they will send you a loan commitment letter, enabling you to move forward with closing on the home.

If you want to help your house stand out to prospective buyers, it may be beneficial to give your residence an exterior makeover. Because if your home boasts outstanding curb appeal, your residence could stir up lots of interest from potential buyers as soon as it becomes available.

Now, let’s take a look at three tips to help you give your residence an exterior makeover.

1. Eliminate Clutter

Lawn gnomes, plastic flamingoes and other home exterior decorations are unlikely to help you sell your residence. In fact, these lawn decorations may prove to be major turn-offs to buyers. However, if you remove home exterior decorations and assorted clutter from outside your home, you could make your residence more attractive than ever before.

Remember, your home only gets one chance to make a positive first impression on a buyer. If you eliminate clutter from outside your house, you can help your house make a great first impression on buyers. And as a result, many buyers could be drawn to your residence when they see it for the first time.

2. Take Care of Your Lawn

Tall grass, weeds and other lawn problems may make it tough for a buyer to fall in love with your house. Fortunately, if you take care of your lawn, you may be able to differentiate your residence from comparable houses in your city or town.

Spend some time mowing the lawn, trimming hedges and removing debris from walkways outside your home. Of course, if you want expert lawn care help, you can always hire a professional landscaping company too.

3. Consider the Buyer’s Perspective

How buyers perceive your residence likely will have far-flung effects on your home selling experience. For example, if your home has a pristine lawn and beautiful siding, a buyer may be drawn to your residence. On the other hand, if your home has a messy lawn and damaged siding, a buyer may shy away from your house.

Think about how a buyer may perceive your residence when he or she sees it for the first time. Then, you can prioritize home exterior upgrades and improve your residence’s exterior accordingly.

As you prepare to list your residence, you may want to employ a real estate agent as well. This housing market professional will work with you to develop an effective home selling strategy.

Usually, a real estate agent will learn about you and your home selling goals. He or she next will provide recommendations and suggestions so you can upgrade your residence before you list it. Finally, after you list your home, a real estate agent will promote your residence to prospective buyers. And if you receive an offer to purchase your home, a real estate agent will help you make an informed decision about this property buying proposal.

For home sellers, it often is beneficial to upgrade a residence’s exterior. If you start home exterior improvement projects today, you can take the first steps to enhance your house and maximize your property sale earnings.

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