Mortgage Pre-Qualification vs. Pre-Approval: What's The Difference?
By Bill Wehr
Your realtor will want you to talk with a mortgage company as soon as possible. The reason is that the realtor needs to know the top price range you can afford and housing expense you are comfortable with. It also helps your realtor when presenting an offer to the seller's agent to show that you have taken steps to approval. It may very well help persuade the seller to accept your offer. In many housing markets the pre-qualification or pre-approval letter is accepted as part of the purchase presentation to the seller's agent.
When you are speaking with a loan officer to be pre-qualified you are giving information about your financial condition. The loan officer will also ask questions regarding your credit. There may even be a credit bureau drawn to see where you stand. Then the loan officer will give you an opinion of how much you can afford based on the information you have told that person. This is not a commitment to make the loan! You should be given a letter that states the pre-qualified mortgage amount and type of loan. It should state further that loan approval could be issued after the information you gave is verified & formally underwritten.
When you receive a pre-approval it has more weight than a pre-qualification. The pre-approval letter will give the maximum loan amount with the specific details of the total mortgage. It should have only conditions such as clear title report, underwritten appraisal, general closing conditions and no negative change in your status as a buyer.
If you are serious about buying a home, and you are satisfied with the mortgage company, you should get as solid a pre-approval as you can. You don't want any surprises along the way.
About the author:
Bill Wehr has been in home loan origination for over 25 years. He is the owner of Great Pacific Northwest Mortgage http://www.billwehr.com , a residential mortgage company serving Oregon and Washington.
Visit our BLOG to see Questions and Answers from other users about your finances.
The latest information and news on Mortgages:
Saudi Arabia?s Mortgage Law to May Double Market Size, NCB Says (Bloomberg)
Feb. 8 (Bloomberg) -- Saudi Arabian property market may double in size by 2015 if a planned mortgage law is put into effect, NCB Capital said. ?A timely implementation of the mortgage law would further support a sustained take-off in the real estate space,? chief economist Jarmo Kotilaine said in an...
Mortgage Bankers Association Forced Into Short Sale: Today's Outrage (TheStre...
How bad is the mortgage crisis?It's so bad that the Mortgage Bankers Association had to sell its headquarters for less than it owes.
Mortgage group has mortgage trouble (St. Louis Post-Dispatch)
If there?s any group that should be wise to the dangers of too much debt, it?s the Mortgage Bankers Association. The Wall Street Journal reports today, however, that the association took a big loss on the sale of its office building.
State Street to Pay Mortgage Securities Investors $300 Million (BankTech)
Firm settles with the SEC over charges it misled investors about subprime mortgage investments.
Mortgage funds to stay in deep freeze (The Australian)
INVESTORS could be forced to wait up to four years to recover their money from frozen mortgage funds
Yahoo! News Search Results for refinance
Village Council working to refinance two bonds (The Manchester Enterprise)
Although the process is extremely early in development, the Manchester Village Council is in the process of finding ways to save money over time for the community via bond refinancing.
Aussie power plants face US$19b funding headache (Business Times (Malaysia))
SYDNEY: Australia's electricity sector faces a A$22 billion (A$1 = RM2.98) headache as it seeks to refinance debt over the next two years, with uncertainty over efforts to put a price on carbon pollution hurting investment, ratings agency Fitch said yesterday.
Aussie power plants face US$19b funding headache (Business Times (Malaysia))
SYDNEY: Australia's electricity sector faces a A$22 billion (A$1 = RM2.98) headache as it seeks to refinance debt over the next two years, with uncertainty over efforts to put a price on carbon pollution hurting investment, ratings agency Fitch said yesterday. About 80 per cent of the Australia's po...
Refinance and Save! Low Rates plus 1% Cash Back on CEFCU Auto Loans (Caltech ...
Get 1% CASH BACK on your next CEFCU auto loan (up to $450) whether it's for a new or pre-owned vehicle, or refinanced vehicle from another lender. Offer extended to April 30, 2010.Get pre-approved today!Apply online with WebLoan24 or request an application from any CEFCU office.American Express Trav...
Obama aims to help small businesses (Portsmouth Herald)
President Barack Obama on Friday proposed the expansion of two critical Small Business Administration lending programs aimed at allowing small businesses to refinance and increasing limits for working capital. These are both legislative proposals...
