Pre-Qualified vs. Pre-Approved

You’ve found the perfect house, you’ve spoken with your lender, you even have a pre-qualification letter … does this really mean you are approved?

Contacting a lender and getting pre qualified for a mortgage usually consists of not much more than a five minute conversation and a review of the borrower’s credit report by the loan officer. This means your application for a mortgage has not been reviewed by an underwriter, checked against the lender’s guidelines, or verified any of your income, assets, or employment that you verbally disclosed during your time of your application with the lender.

Getting pre-approved by a lender involves providing your lender or loan officer with a specific combination of some of the following documents that pertain to your loan scenario: signed loan application and disclosures, pay stubs, tax returns, W2’s, bank statements, drivers license, divorce decree, child support verification, etc. In other words, until the underwriter can verify the statements in your application, you are not approved.

Getting from a pre-qualification to a pre-approval is very quick and easy to achieve. Simply staying in touch with your loan officer and providing them with the documentation they request in order to process your loan application is all it takes. The lender can then continue to tailor your needs and get you the right mortgage to buy your home.

Remember, before you start shopping for a new home, make sure you have a pre-approval, not just a pre-qualification.