Are you pre-qualified or pre-approved for a mortgage loan?

It’s wise before you go out shopping for a loan to set up some time to meet with me so we determine how much you can afford.  This immediately puts you in a better position as a buyer when you begin to look for your new home.  This is an opportunity for you to understand the difference between being pre-qualified for a loan and pre-approved for a loan.  The difference in these two terms can be crucial when you decide to make an offer on a house.

In order to get pre-qualified for a loan, we will collect information about your debt, income, and assets and we will look at your credit profile and determine your goals for a down payment.  Then, we will discuss the various loan programs which will best fit your needs.  We will then issue you a pre-qualification letter indicating an amount you are qualified to borrow.

Please realize that a pre-qualification letter is just an estimate of what you are eligible to borrow and it’s not a commitment to lend.  Getting pre-approved for a mortgage loan gives you a decisive advantage when the time comes to make an offer on a home because you have been approved for a loan for a specific amount.

How do I get pre-approved?  After completing a mortgage application and providing various information such as employment verification, asset info, and financial status such as W-2 forms, bank records we’ll review your mortgage options.  Once we look that over you will receive a pre-approval letter indicating the amount the lender is willing to lend you for your new home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal and certain other conditions. If your financial situation changes, i.e. a job loss, the interest rates rise or a specific expiration date passes, we may review your situation and recalculate the pre-approval amount.