What is the difference between pre-qualification and pre-approval?
Pre-qualification is an assessment by the lender, based on certain basic information given by the borrower, usually employment history, income, asset information, current monthly debt, and credit worthiness. Based on this quick evaluation, the lender makes a tentative decision to pre-qualify the borrower for a certain loan amount. A pre-qualification works to form an opinion for the lender. This is not a commitment to the applicant.
Like a pre-qualification, a pre-approval involves a lender making an assessment of a borrower’s buying capacity based on her or his income. But unlike a pre-qualification, a pre-approval letter also checks the applicant’s credit and is a more solid verification of a borrower’s income. A pre-approval takes longer to process and will require more comprehensive documentation, but gives a clearer and more definitive guarantee of the loan amount a borrower is entitled to.
We encourage all of our clients to apply for a pre-approval in order to make them the strongest possible buyers. Desirable properties can sometimes come on to the market and sell very quickly. We want our clients to be able to approach a seller with every possible advantage.
Contact Premier Funding Network at 714 283-9900 and let us get you pre-approved and ready for the big step into home ownership.