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| Mortgage |
| Pre-Qualification
vs. Pre-Approval |
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When you are ready to buy
a home, the first step is to find out exactly how much you can afford. We at
LisaFriedman.com can recommend a mortgage lender that can pre-qualify you from the
start. As part of our team our mortgage lender provides you the homebuyer with a
number of choices regarding your future mortgage for your home. Pre-approval is a
credit commitment. It differs from a pre-qualification. Please read the
information below to see exactly what the differences are. |
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What is a
Pre-Qualification? |
A pre-qualification consists of a telephone interview with the mortgage lender of your
choice. The mortgage lender will ask questions such as:
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1. What
is your annual income?
2. Does your spouse work? What is his/her income?
3. How long have you and your spouse been on the job?
4. How much money do you have to put down and close on your mortgage?
5. What are your debts? (Car loans, Credit cards, Student loans, etc.)
6. Do you generally pay your bills on time?
7. What area are you considering looking in? (Mortgage rep can establish
approximate taxes)
8. Can I obtain your credit report?
A pre-qualification establishes approximately what you can afford. Looking at these
factors an approximate purchase price can be established. |
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| What is a Pre-Approval? |
A pre-approval is a credit commitment. It is an approval for a mortgage subject to
an appraisal. When you apply for a pre-approval a mortgage rep would take an
application and personally examine all of the following:
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1. One month pay stubs
for each applicant.
2. W-2's or 1040's for two years.
3. Asset accounts such as savings, mutual funds, etc.
4. Liabilities - credit card statements, car loans, student loans, etc.
5. Your credit report.
Your application would then be submitted to an underwriter for approval. At the time
of application you would have the opportunity to lock in your rate so that there will not
be any surprises. You are comfortable knowing what your mortgage payment is and what
price home you can afford. Because you are approved, you are negotiating from a
position of strength. When you make an offer on a property, you have a very strong
advantage. There's no question on your ability to afford the property. You have
an approved mortgage credit application. If the choice is between your offer and someone
whose financial arrangements are unknown, the seller will prefer your offer. |
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| Pre-Qualification vs.
Pre-Approval |
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Pre-qualification provides you with:
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1. An estimated purchase price.
2. Does not insure that you will be approved for a mortgage.
3. The interest rate is not locked-in causing you to adjust your purchase price. |
Pre-approval provides you with:
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1. A credit approval assuring you
that you are approved for a mortgage.
2. NO question whether you can afford this home or not.
3. Confidence knowing what your payment will be if you lock-in.
4. Negotiating POWER-Approved. |
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The information
presented on this site is subject to errors and ommissions and is deemed reliable.
Pricing information is based on past performance and in no way indicates
future pricing.
The links provided on this site are for informational purposes only. |
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- lisafriedman.com. All rights reserved |
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