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What is the difference between
pre-qualifying and pre-approval?
A pre-qualification is normally
issued by a loan officer, who, after interviewing you, determines
the dollar value of a loan you can be approved for. However, loan
officers do not make the final approval, so a pre-qualification
is not a commitment to lend. After the loan officer determines
that you pre-qualify, he/she then issues you a pre-qualification
letter. This pre-qualification letter is used when you are making
an offer on a property. The pre-qualification letter indicates
to the seller that you are qualified to purchase the house you
are making an offer on.
Pre-approval is a step above pre-qualification. Pre-approval involves
verifying your credit, down payment, employment history, etc. Your
loan application is submitted to an underwriter and a decision
is made regarding your loan application. If your loan is pre-approved,
you are then issued a pre-approval certificate. Getting your loan
pre-approved allows you to close very quickly when you do find
a house. A pre-approval can help you negotiate a better price with
the seller, since being pre-approved is very close to having cash
in the bank to pay for the house!
See also:
Mid-Island Mortgage Corp Application
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