Are you Pre-Qualified or Pre-Approved for your new home loan?

Before you begin to shop for a new home, you should set up a time to meet with me (whether it be in person or over the telephone) so we can figure out together how much you can afford. This will put you in a much better position as a buyer. It is important to understand the distinction between being Pre-Qualified for a loan and being Pre-Approved for a loan. The difference between the two terms will be crucial when you decide to make an official offer on a house.

In order to get pre-qualified for a loan, we will collect information about your employment history, 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 so that you can present it to your Real Estate Agent or to the seller, if required.

It is important to understand that a Pre-Qualification letter is just an estimate of what you are eligible to borrow based on the verbal information you have provided, not a commitment to lend. Taking the extra step and getting Pre-Approved for a loan gives you a competitive advantage when the time comes to bid on a home because you have been officially approved for the loan you have requested.

To get Pre-Approved, you will need to provide the required documentation to verify the information that was submitted on your employment, income and assets such as pay stubs, W-2 forms, and bank statements. We will submit your application to the appropriate AUS (Automated Underwiting System) and obtain your loan results, sometimes called loan findings. Once your loan has receveive an approval through the AUS using the verified information, we will provide you a Pre-Approval letter indicating the loan you have been Pre-Approved for on your home.