Pre-Qualification vs. Pre-Approval

Many times in this process buyers confuse being pre-qualified with being pre-approved. It is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house. A Pre-approval is a much stronger statement to the seller that you are in a better position. This is especially important when competing in a multiple offer situation.

My dedicated team of experts has developed a process designed around your needs to help you achieve your financial goals. We have a three-fold plan that involves the following:

1. The Home Express Mortgage Plan
2. The Home Express Mortgage Guarantee
3. The “Competitive Guarantee”

Based on this three step process I am confident that all your needs will be met.

When making a decision to move forward and buy a home, it is very important to set the right expectation. Before you begin to shop for a new home, I recommend that we set up a time to meet so we can determine how much you can afford and what the costs might be.

This can be completed either over the phone, in person or over the internet. This will absolutely put you in a better position as a buyer. As you begin to identify properties and negotiate offers, it is important to know your financial exposure. Example: you don’t go to the grocery store to fill up your cart and then go to the check out to only hope you have enough money to purchase everything.

To get pre-qualified for a loan, during the pre-qualification process, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you a competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.

To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to underwriting. Once the application process is complete you will receive a pre-approval letter indicating the amount we are willing to lend you for your home.

A pre-approval letter is still not a full commitment. The final commitment it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, we will need to update and review your situation to recalculate your mortgage amount accordingly.