The Difference Between a Pre-Qualification vs. PreApproval

October 2, 2018

There is plenty of real estate terms used in transactions. Needless-to-say it can be confusing for both buyers and sellers trying to navigate the process. The home loan process might feel overwhelming and difficult to understand. Both buyers and sellers find terms like “PreQualification” and “Pre-Approval” used interchangeably, it’s no wonder they find themselves wondering how to proceed.

 

Pre-Qualification

 

The first step in obtaining a home loan is to meet with a lender and discussing their financial situation. The lender will discuss income, job stability, debt and credit. Once they have performed a basic review of the qualifications and run credit, they will issue a Pre-Qualification Letter to the potential buyer. This letter will identify the maximum sales price, down payment requirement and basic terms of the loan, such as interest rate. The Pre-Qualification letter is used to provide evidence that the buyer has been reviewed by a lender who is vouching for their ability to obtain a loan.

 

Pre-Approval

 

A Pre-Approval is quite different. In this case, the lender collects all the necessary information and proof of eligibility and has it reviewed by the lender underwriter for approval. A PreApproval letter is almost like shopping with cash, the only remaining piece of the puzzle is the property they are buying.

 

Need Recommendations on who to use? 

 

Send me a message and I will be sure to send you a list of professionals I am currently working with! 

 

 

 

 

Please reload

Featured Posts

5 Things NOT to do When Staging

May 7, 2019

1/7
Please reload

Recent Posts
Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

© 2023 by ​MCDONALD&HARRIS. Proudly created with Wix.com.

  • w-facebook
  • Twitter Clean
  • Google Clean