What is the difference between
getting pre-qualified and pre-approved?
Before you meet with a Realtor,
before you walk into an open house, before you start calling
on ads in the paper, GET PRE-APPROVED! Your
financial picture is as unique as you are. So when you begin
to consider buying a home, see a lender first. a
qualified lender can help you look at the big picture,
work with you to determine what you can afford, and discuss
the options available to you. Now let's clarify the
differences between getting pre-qualified and
getting pre-approved.
Pre-qualified is a
process whereby a loan officer obtains information about you,
either over the telephone or face-to-face and indicates the
loan amount you can qualify for and the best type of loan to
meet your particular needs.
The loan officer will want to know information about
your income and a list of your debts.
Through a series of calculations, the lender will be
able to determine the size of a loan you qualify for based
upon loans available in today’s market.
This is referred to as your income to debt ratio.
The term pre-qualified simply means that a
mortgage or real estate representative has examined your
income to debt ratios...this does not mean pre-approved.
Pre-approval is a step beyond pre-qualifying.
In a pre-approval, the credit part of the loan package
is sent to the lender and get you approved for a certain t ype of
loan with a particular lender before you have found or made an
offer on a property.
Pre-approved means
that a mortgage or real estate professional has examined,
submitted and received acceptance on your financial capabilities
of qualifying for a
mortgage based upon your income to debt ratio, loan
information, and credit profile.
Many times borrowers are told they are pre-qualified
prior to the lender examining in detail the borrowers complete
financial profile. This leads to great frustration and
disappointment.
With a pre-approval you can close the loan faster and
often will find your offer more acceptable to the seller.
If you are about to begin the process of buying a home
I would strongly recommend pre-approval over simply
being pre-qualified.
The loan professional that has made this information
available to you specializes in assisting individuals in the
home buying process.
Your loan professionals in most cases can advise you
on the best approach and help you get the home of your dreams!
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I hope you found this article
helpful. Getting pre-qualified AND pre-approved are essential
steps in the home buying process.
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