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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 set up a time to meet with me. It is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.
To get pre-qualified for a loan, I will verbally collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I do not issue pre-qualification letters.
It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a pre-approval and not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.
To get pre-approved, you will complete a mortgage application on the phone and in persona and provide me with various information verifying your employment, assets and financial status such as pay stubs, W-2 forms and bank records. We’ll review your mortgage options and submit your application to the automated underwriting system according to the loan program that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount we are likely willing to lend you for your home.
A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, we must review your situation and recalculate your mortgage amount accordingly.
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