What is the difference between pre-qualified
and pre-approved?
Pre-qualifying 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. The lender through a
series of calculations 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 your loan package is
evaluated by the lender to allow you to get you approved for a certain
type of loan with a particular lender before you have found or made an
offer on a property. Pre-approved means that a mortgage 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, we would
strongly recommend pre-approval over simply being pre-qualified.
Landmark Mortgage
specializes in assisting individuals with obtaining home loans, including
pre-qualification and pre-approval.
We can advise you on the best
approach and help you get the house of your dreams!
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