|
Home Loan Pre-Qualification vs. Pre-Approval
While shopping for a home, brokers and lenders pre-qualify or pre- approve you for a mortgage. Home loan pre-qualification and pre-approval are different and distinct processes, so it is important for you to understand the difference.
Pre-Qualified
We can pre-qualify you for a home loan amount fairly quickly. Getting pre-qualified for a home loan is a good first step that will let you know if you should proceed to the pre-approval process. To get pre-qualified you will need to complete a mortgage application and allow the broker or lender to pull your credit. They will review the mortgage application and your credit and let your know how much you are pre-qualified for.
Pre-Approved
The mortgage underwriter completes your pre-approval for a home loan, loan officers, brokers and processors can not. Typically mortgage brokers do not have underwriters on staff, so it takes a bit more time. A valid pre-approval letter is generally required to be submitted with your offer contract. If you are pre-approved, your home loan application has already been submitted upfront, now all you have to do is find the home you want, have it appraised, and then you should be able to close in a short amount of time. Some mortgage brokers and lenders will issue what they call pre-approvals, that have not been reviewed by an authorized underwriter, those are simply just pre-qualifications.
To get pre-approved for a home loan you will need to provide the underwriter with your income and asset documentation (W2’s, Bank Statements, etc). The underwriter will review your credit, mortgage application, documentation, and then approve you for a set loan amount and property value. Once you have been pre-approved for a home loan you receive your pre-approval letter.
Knowing exactly what type of home loan you can obtain will allow you to shop and negotiate with confidence. Sellers do not like to take their properties off of the market for long periods of time without knowing you are good for your purchase. The ability to close quickly is another way to get a great deal.
|
