Mortgage Pre-Qualification vs. Pre-Approval: What's The Difference?

 


Visitors: 431

A pre-qualification is not the same as pre-approval. The buyer, seller, and agents involved in the transaction need have the same agreement regarding the buyer’s ability to close the purchase.

Your realtor will want you to talk with a mortgage company as soon as possible. The reason is that the realtor needs to know the top price range you can afford and housing expense you are comfortable with. It also helps your realtor when presenting an offer to the seller’s agent to show that you have taken steps to approval. It may very well help persuade the seller to accept your offer. In many housing markets the pre-qualification or pre-approval letter is accepted as part of the purchase presentation to the seller’s agent.

When you are speaking with a loan officer to be pre-qualified you are giving information about your financial condition. The loan officer will also ask questions regarding your credit. There may even be a credit bureau draw to see where you stand. Then the loan officer will give you an opinion of how much you can afford based on the information you have told that person. This is not a commitment to make the loan! You should be given a letter that states the pre-qualified mortgage amount and type of loan. It should state further that loan approval could be issued after the information you gave is verified & formally underwritten.

When you receive a pre-approval is has more weight than a pre-qualification. The pre-approval letter will give the maximum loan amount with the specific details of the total mortgage. It should have only conditions such as clear title report, underwritten appraisal, general closing conditions and no negative change in your status as a buyer.

If you are serious about buying a home, and you are satisfied with the mortgage company, you should get as solid a pre-approval as you can. You don’t want any surprises along the way.

Bill Wehr has been in home loan origination for over 25 years. He is the owner of Great Pacific Northwest Mortgage http://www.billwehr.com , a residential mortgage company serving Oregon and Washington.

(374)

Article Source:


 
Rate this Article: 
 
Target Account Profiling and Pre qualification Why Dont We Just Ask the ..
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Mortgages Pre Approval - Why You Need Mortgage Pre Approval to Buy a New House ..

by: Darin Sewell (September 24, 2008) 
(Finance/Mortgage Refinance)

Mortgage Pre Approval - Getting Pre Approved For a Home Loan Online

by: Carrie Reeder (July 09, 2005) 
(Finance/Mortgage Refinance)

Mortgage Pre-Approval and Your Sanity

by: Raynor James (October 16, 2006) 
(Real Estate)

Advantages Of Mortgage Pre-Approval

by: Michelle Roebuck (June 14, 2005) 
(Finance/Mortgage Refinance)

9 Hurdles in Your Way to Mortgage Pre Approval

by: Bill Carey (December 25, 2005) 
(Finance/Mortgage Refinance)

Facts About Mortgage Loan Offers And Pre-Approval

by: Peter Kenny (March 23, 2007) 
(Finance)

Home Mortgage Loan Pre-Approval Online - Keys When Applying For A Mortgage ..

by: Carrie Reeder (April 05, 2005) 
(Finance/Mortgage Refinance)

What is Pre Qualification?

by: Paul Hodosh (July 28, 2008) 
(Real Estate/Buying)

Pre-Qualification - Not Prejudgment

by: Cindy King (September 16, 2008) 
(Business/International Business)

Target Account Profiling and Pre qualification Why Dont We Just Ask the ..

by: Brian Steel (July 17, 2008) 
(Business/Marketing)