Pre-Qualification

Posted February 21, 2008

What is a Pre-Qualification?

Simply put, a pre-qualification is an initial assesment of one’s ability to qualify for a mortgage loan. In it’s purest form, getting pre-qualified means that you have submitted enough general information to a lender that would allow a lender to offer an opinion as to your ability to get approved for a mortgage. This is not an actual approval nor the same thing as a pre-approval.

Most lenders that offer a pre-qualification do not verify any information. In most cases they will do a credit check if they feel it would make a difference (i.e. the potential borrower indicates doubt in regards to credit), but for a simple pre-qualification that is generally it. Income, job history, housing history, assets and any other items that would be required for approval are not documented. They may be discussed, but nothing is documented or reviewed.

In many ways it is like sitting down with a lender and saying “I make $60,000 a year, have great credit and only $350 a month in debt. How much can I buy?” From there the lender would take the general information and state something like “Based on that information, you would most likely qualify for a payment of $1200, plus taxes and insurance. That would probably get you a home around $180,000.”

That’s it. Nothing confirmed or documented. Just doing simple math with basic round numbers to get an idea. Want a pre-qualification for yourself? We offer an Easy Qualifier that will do just that!

Most Realtors prefer more than a pre-qualification. With so many potential issues that could present themselves, Realtors generally prefer a borrower get pre-approved before they spend too much time looking at homes. For a better indication of what you can borrow, you should get a Pre-Approval. More info on Pre-Approvals to come.

Charlotte Mortgage Loan Pre-Approval

Category Posted in Buying a Home, Mortgage 101, Mortgages, Refinance