Tina McManus | Beverly Real Estate, Salem Real Estate, Hamilton Real Estate, Danvers Real Estate

If you’re in the market to buy a home, you’re probably learning many new vocabulary words. Pre-approved and pre-qualified are some buzz words that you’ll need to know. There’s a big difference in the two and how each can help you in the home buying process, so you’ll want to educate yourself. With the proper preparation and knowledge, the home buying process will be much easier for you.  


This is actually the initial step that you should take in the home buying process. Being pre-qualified allows your lender to get some key information from you. Make no mistake that getting pre-qualified is not the same thing as getting pre-approved.

The qualification process allows you to understand how much house you’ll be able to afford. Your lender will look at your income, assets, and general financial picture. There’s not a whole lot of information that your lender actually needs to get you pre-qualified. Many buyers make the mistake of interchanging the words qualified and approval. They think that once they have been pre-qualified, they have been approved for a certain amount as well. Since the pre-qualification process isn’t as in-depth, you could be “qualified” to buy a home that you actually can’t afford once you dig a bit deeper into your financial situation. 

Being Pre-Approved

Getting pre-approved requires a bit more work on your part. You’ll need to provide your lender with a host of information including income statements, bank account statements, assets, and more. Your lender will take a look at your credit history and credit score. All of these numbers will go into a formula and help your lender determine a safe amount of money that you’ll be able to borrow for a house. Things like your credit score and credit history will have an impact on the type of interest rate that you’ll get for the home. The better your credit score, the better the interest rate will be that you’re offered. Being pre-approved will also be a big help to you when you decide to put an offer in on a home since you’ll be seen as a buyer who is serious and dependable.  

Things To Think About

Although getting pre-qualified is fairly simple, it’s a good step to take to understand your finances and the home buying process. Don’t take the pre-qualification numbers as set in stone, just simply use them as a guide. 

Do some investigating on your own before you reach the pre-approval stage. Look at your income, debts, and expenses. See if there is anything that can be paid down before you take the leap to the next step. Check your credit report and be sure that there aren’t any errors on the report that need to be remedied. Finally, look at your credit score and see if there’s anything that you can do better such as make more consistent on-time payments or pay down debt for a more desirable debt-to-income ratio.

Owning a house is a mark of reaching adulthood for some people. It's a sign of financial independence. Having a house to call your own also alerts people to the fact that you trust yourself. After all, you don't know what's going to happen in the future.

Just because you want a house badly doesn't mean you'll get one

And a lot could happen. Job changes, relationship additions and subtractions and personal goal changes are just a few shifts that could occur after you buy a house. You really do need to trust yourself to take on the type of expense that can easily take 30 years to pay off.

It takes courage to own and care for a house, to keep a house in good functioning condition. Another thing that it takes courage to do is to walk away from the chance to own a house. If your finances aren't in good condition, it may very well be hard for you to own a house.

Find a lender who will approve your mortgage and you might struggle to make your loan payments each month. Worse, you might pay your mortgage for five to seven years only to lose the house, tossing away the money that you invested in closing costs, mortgage insurance and homeowner's association fees.

Why paying mortgages could be hard

Risks of losing your house or struggling every month to make mortgage payments is one of the leading reasons why poor finances is the top thing that could make it hard to own a house. Emotion is another major thing that could make it hard to own a house. Besides emotion, there are other key factors that could cause you to struggle with a mortgage. These factors are:

  • Divorce - A contentious divorce could easily leave you in a financial bind. You might be responsible for paying your ex-spouse's housing expenses, making it hard to own a house of your own.
  • Lifestyle - Frequent travel, a love for loud music and a strong social appetite could make it hard to own a house. Your lifestyle could make it hard to comply with homeowner's association rules. It could also create problems with people you live near.
  • Neighbors - Although money is the leading thing that could make it hard to own a house, neighbors might be the second thing that could keep you from home ownership. Disruptive neighbors, hateful neighbors and contentious neighbors could drag you in and out of court so much that you spend years paying legal fees. Because you're dealing with the legal issues, you might not pass a lender's mortgage qualification guidelines.

Money isn't the only thing that makes owning a house hard

Money, emotion, social habits and relationships could make it hard to own a house. They could cause you to hold onto bad habits. These four things could also cause you to develop destructive relationships with neighbors.

Develop destructive relationships with neighbors and you could be forced out of your house even if you make your mortgage payments on time. Upset neighbors won't hesitate to pick up the telephone and call law enforcement. They also can make living next to them so uncomfortable that you choose to move just so you can have peace.