What does it mean to be pre-qualified for a home loan?
Pre-qualified for a loan gives you an idea of how much you might qualify for. You have not applied for a loan. The mortgage officer has only your word on your income, assets and liabilities. None of the information has been verified yet. The loan amount is not guaranteed. A pre-qualification letter merely states you are likely to be approved for a mortgage. This is why we only do pre-approvals.
What does it mean to be pre-approved for a home loan?
Pre-approved for a loan means that not only have you provided information on your income, liabilities, and assets, but that the information has been verified. Also, your credit report may be pulled to learn about your credit history and credit-worthiness.
A pre-approval letter carries more weight than does a pre-qualification letter. It means that you are more likely to be approved for a mortgage. It also states the amount for which you may be approved for. It is your best leverage when making an offer on a home.
Being “pre-approved” means you have a mortgage commitment from your lender, making you a strong buyer. When you find your perfect home, your offer will be more seriously considered if you have a full loan commitment from a strong lender behind you.
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Getting pre-qualified or pre-approved status does not necessarily guarantee that your loan will actually go through. Complete, accurate, and verified information is important for both the borrower and the lender to have a successful outcome.
Remember that it is very important to inform the Loan Officer of any changes in the financial information that was provided at the time of approval, as it may make a change in the amount or type of loan that you can qualify for.
- Save time with a loan pre-approval…no wasted time viewing homes you may not be able to purchase.
- Your real estate professional will be able to work faster, showing you homes that will suit your needs and budget.
- When you find the right home, you can make a strong, confident offer.
- Sellers will take you seriously knowing you’re an approved buyer.
- Your offer will be more credible than the competition because you’re prepared to purchase.