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 Are you pre-qualified or pre-approved for a loan?
Before you begin to shop for a new home, you should schedule a consult with your loan officer so they can assist you with determining how much mortgage you can afford. This will put you in a better negotiating position as a buyer. That’s why it is important to understand the distinction between being pre-qualified and pre-approved for a loan. In today's fast paced housing market having obtained pre-approval rather than pre-qualification can mean the difference between the seller accepting your offer over another.
When you are pre-qualified for a loan, your loan officer collects information regarding your debts, income, and assets. They review your credit profile and assess goals for a down payment in addition to getting an idea of different loan programs that would work for you. A pre-qualification letter indicates the probable amount of financing and the toptions for which you may qualify.
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. Obtaining a pre-approval letter, rather than a pre-qualification letter, for a loan can give you competitive advantage when the time comes to bid on a home because the seller understands that you have been formally approved for a loan for a specified amount.
It is a lot less complicated today to obtain a pre-approval. Why wait hours or days for an approval when you can have one immediately? We pride ourselves in supplying our loan officers with the latest technology available to facilitate the approval process. Our loan officers have access to Automated Underwriting Engines direct from the source and through various lenders that can be utilized to provide you with instantaneous pre-approval.
Complete our online application or ask your loan officer to complete one for you. In most cases your loan officer can run your credit and submit your loan immediately after application. Once the automated approval process is complete you will receive a pre-approval letter indicating the amount the lender is willing to lend you for your home.
A pre-approval letter is binding on the lender only to the extent that an acceptable appraisal of the home and fulfillment of other approval conditions are completed. If your financial situation changes with employment, interest rates rise more than your approved threshold or a specified expiration date passes, your loan officer will must resubmit your information for approval again. Nothing is foolproof, but with pre-approval you will see a lot more green lights than red.
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