Eva Luna
Be kind...life's hard!
Member since 8/05 4750 total posts
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God, bless & heal my DH, JenG's DH Rob & DebG
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Re: Prequal vs. Preapproval
A pre-qual is easy to get...it just means you are "pre-qualified" for any mortgage. A pre-approval means that you've been screened and will almost undeniably be approved for underwriting a mortgage against the property you're bidding on.
I found this online...
The benefits of pre-approval versus pre-qualification include the ability to make an offer on a home that many sellers will prefer over bidders who have not been pre-approved. As a matter of fact, most realtors and sellers PREFER ONLY applicants who've been pre-approved, because it provides them both the assurance that a lender has set aside funds for the borrower, pending conditions, and that the realtor is dealing with a serious homebuyer. A pre-approval letter is considerably more powerful than a pre-qualification letter. It provides the seller the assurance that your financing and your offer are secure. Once you've been pre-approved, you're ready to make an offer!
Pre-approval means that you've made a loan application and submitted financial information such as pay stubs, W2's, and bank statements. I've reviewed that information and obtained a credit report. It also means I've submitted your loan for underwriting review.
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PRE-QUALIFICATION VS. PRE-APPROVAL
Speak with a loan professional before you start to shop for a home! It's important to know how much home you can afford, obtain a written pre-approval letter, and provide yourself with a superior negotiating position once you find the right property.
What's pre-qualification?
Pre-qualification is an informal discussion between the borrower and the lender. You'll learn how much you can afford and approximately how much the monthly payments will be. Getting pre-qualified is not a guarantee of a loan, and is different from getting a loan pre-approval. The lender verifies nothing, but relies completely on what you tell him about your income, assets, debts, etc.
What's pre-approval?
Pre-approval is a more formal process in which the lender will actually verify employment, income, assets, liabilities and cash available to make a home purchase. Pre-approval is a bit more work than pre-qualification, and takes a little longer. A pre-approval letter from a reputable financial institution is considerably more powerful than a pre-qualification letter. It provides the seller with reassurance that your financing and your offer are secure. It also provides you with peace of mind, knowing that you can complete the acquisition of your chosen home without any surprises.
Message edited 8/17/2006 6:31:38 PM.
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