- home >
- purchase >
- homebuyer's guide >
- step 4 >
- prequalify or preapprove
Before you go looking for a home, you should see how much financing you may qualify for. At Chase, we are happy to help you become prequalified or preapproved for the loan that best suits your needs.
The prequalification process
During the prequalification process, Chase will typically ask you for some basic financial information that will help them decide how much money you could comfortably afford to borrow. Chase will then provide you with a prequalification letter summarizing your home-buying budget.
Prequalified vs. preapproved
Your prequalification letter is an important resource, but it does not mean you will be automatically approved for a loan.
- A prequalification letter is simply a reference document designed to provide some general guidance on how much money you can potentially afford to borrow.
- Once you've found a house you'd like to buy, you'll still need to go through the formal loan approval process with a mortgage lender.
In contrast, preapproval means that you've applied for and received conditional approval for your loan, before you actually make an offer on a house.
- As part of the preapproval process, we will run a credit check on you and review your credit score.
- If you are preapproved for a loan, you can be confident that your loan will be processed quickly and easily, as long as all information you have provided is accurate and can be documented upon request.
How to use your prequalification letter
Your prequalification letter can help you start your home search on the right foot. A buyer's real estate agent (one who represents only you in a purchase transaction) will often request that you get prequalified or preapproved for a mortgage before looking at houses to help you find a home that best suits your actual budget. Keep in mind that if you are working with a seller's real estate agent (one who represents the seller), you may want to avoid disclosing your maximum budget, as it could potentially work against you in the negotiation process.
When applying for your mortgage, don't switch banks or pay off major bills that will dramatically reduce your bank balance.
