rightAre you Pre-Qualified or Pre-Approved for a loan?

Before you begin to shop for a new home,there are a few essential steps to help everything go smoothly. You should set up a time to meet with us, whether in person, online or over the phone so we can figure out
how much you can be approved for, and find out estimated payments. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house. Most sellers require a pre-approval letter for the seller to accept an offer.


Pre-Qualification

To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.


It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend.
Getting pre-approved for a loan gives you competitive advantage when the time comes to make an offer on a home because you have been approved for a loan for a specified amount.


Pre-Approval

To get pre-approved, you will
complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as pay stubs, W-2 forms, tax returns and bank statements. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.


A pre-qualification it without verifying your information and a pre-approval is with verifying your information