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National Mortgage Pre Approval – Pre Qualification

Mortgage Pre Approval – Pre Qualification

 

Your mortgage pre-approval is important for many reasons. First, the home loan pre-approval lets you know what mortgage program you qualify for, how much house you can afford, down payment required, closing costs and your monthly payment to name a few things.  Equally important, it tells the home seller that you are qualified to close on the transaction.

All home sellers will want to ensure you the buyer has your finances in order before looking at your contract offer. Think about if you were a home seller – wouldn’t you want to ensure the buyer has obtained a solid mortgage pre-approval in advance before you accept their offer and start packing up boxes?  Of course, you would.

Regardless of the type of mortgage you choose, the mortgage pre-approval should be your first step. Research shows that a pre-approved home buyer has 97% of the buying power of a cash buyer! In addition, many realtors and sellers alike will demand buyers be pre-approved before considering an offer.

One commonly asked question we receive from prospective home buyers is what is the difference between a home pre-approval and pre-qualification?

Many prospective homeowners hear these different mortgage terms (pre-qualified, pre-approved, credit check, etc) and do not completely understand the difference.  Even more confusing, many mortgage professionals rely on their own different interpretations. Below we have outlined some clarification on this subject.

Mortgage Pre-Qualification:

This is when your loan application is processed and your credit is also checked. The entire process typically takes around 20 min to complete.  At this time your debt-to-income ratios is calculated to determine the purchase price that you can afford. All the information you provide to the mortgage specialist is based on your word (income, job history, bank/asset information, etc) The only thing that can be 100% verified at this is the point is your credit and debts, which is the most critical part.  Assuming the information you provide is 100% accurate, everything the mortgage specialist tells you should be accurate as well. Once this evaluation is complete, the mortgage specialist can issue a letter of pre-qualification to you.

Mortgage Pre-Approval:

Basically, everything is noted above. The key difference is all the information you provided on your loan application is VERIFIED and checked at this point. During the pre-approval process, your loan specialist will ask that you deliver all the documents needed for underwriting purposes.

Income – pay stubs, tax returns, etc.

Assets  – bank account statements, retirement account statements, etc.

Job/Rent history – verification.

ID – social security and driver’s license.

Once all your paperwork is received, your loan file will be reviewed and approved by the underwriter. At this point, you will have a complete loan pre-approval. Keep in mind, your loan pre-approval still does not guarantee the home loan to you. Once you find the perfect home to purchase, there are many other important factors related to the actual home itself (not you) that need to be approved as well.

Items like the home inspection and home appraisal are very important “collateral requirements” that need to be approved by the lender as well.  Of course, these requirements will not be satisfied until you have a completely executed contract on a home.

Again, many mortgage professionals rely on different interpretations of pre-qualified and pre-approved. It really comes down the mortgage specialist. Either way, a properly trained home loan specialist will be able to foresee any potential issues well in advance and navigate through these items properly.

LOAN PROGRAMS

For more critical information about getting pre-approved for a home loan, you can do two things:

  • Fill out the Request Contact Form at the top of this page, and a Loan Specialist will contact you back with the information you need to move forward, it takes just a few min.
  • Call us at 888-705-1975 and speak directly to a Loan Specialist who can take you through the process and make it easy for you to understand.

We know that educating you is the best way to serve you, and we are happy to have the opportunity to assist you.

 

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9050 Cypress Green Dr. Suite #403 Jacksonville, FL 32256

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