Today, we’re going to discuss the difference between a pre-qualification and a pre-approval. Although people who aren’t in the mortgage business use these terms synonymously, they are actually quite different.
AnnieMac Home Mortgage does an excellent job with pre-qualifications. We don’t want customers to get their hopes up thinking they will get approved for a mortgage only to find out they can’t qualify. We look at tax returns, W-2s, and pay stubs. We do a full analysis of the items you need to get qualified. The loan originator reviews this information and determines whether the loan will fall within the program guidelines.
A pre-approval goes one step further. This is a much more stringent process. Not all lenders offer pre-approvals, either. We offer a TBD (to be determined) pre-approval. You can get this pre-approval before you even have a house picked out. We will submit your credit, income, and assets to the underwriter, who ultimately signs off on the work the loan originator has done.
The pre-approval letter carries more weight when you make an offer. It also takes a load off your mind because you know that the loan has been properly vetted up front. A pre-qualification can be done very thoroughly, but the pre-approval is signed by the underwriter, who is the lender’s ultimate decision maker. The pre-approval really strengthens your negotiating position and eases anxiety because you know you won’t hit any roadblocks.
If you have any questions, just give us a call or send us an email. We would be happy to help you!
AnnieMac Home Mortgage does an excellent job with pre-qualifications. We don’t want customers to get their hopes up thinking they will get approved for a mortgage only to find out they can’t qualify. We look at tax returns, W-2s, and pay stubs. We do a full analysis of the items you need to get qualified. The loan originator reviews this information and determines whether the loan will fall within the program guidelines.
A pre-approval goes one step further. This is a much more stringent process. Not all lenders offer pre-approvals, either. We offer a TBD (to be determined) pre-approval. You can get this pre-approval before you even have a house picked out. We will submit your credit, income, and assets to the underwriter, who ultimately signs off on the work the loan originator has done.
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A pre-approval is much stronger than a pre-qualification.
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The pre-approval letter carries more weight when you make an offer. It also takes a load off your mind because you know that the loan has been properly vetted up front. A pre-qualification can be done very thoroughly, but the pre-approval is signed by the underwriter, who is the lender’s ultimate decision maker. The pre-approval really strengthens your negotiating position and eases anxiety because you know you won’t hit any roadblocks.
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