Pre-Approval
Posted April 6, 2008
What is a Pre-Approval?
The term “pre-approval” has taken on many different meanings depending on who you talk to. Too many people confuse a pre-qualification with a pre-approval, but they are not the same. A pre-qualification is a very general and very simple opinion as to what mortgage you may qualify for. However, the basis of a pre-qualification is all discussion and nothing is really explored.
A mortgage pre-approval is much more than that. When you go through the pre-approval process, it is more in depth and usually takes a bit more time. In most cases, a lender will discuss your needs and goals, obtain information related to your employment history, credit history, banking history and any other information needed to help determine the pre-approval. Some documentation such as pay stubs, bank account statements, tax returns, ect may be required as well.
Once the lender has received the documentation needed, your credit would be reviewed. With your documentation and credit information, a lender worth working with should know enough about how an underwriter would look at the information and what type of decision they may make on your application. In a sense, the lender would “pre-underwrite” a loan application.
After taking the time to determine what type of underwriting decision you would most likely obtain, the lender can use current mortgage rate and program details to help determine the maximum loan size you may get approved for.
Keep in mind that a pre-approval is not a guarantee that you will close on a home loan, even if you follow the lender’s advice to the end. However, the chances of actually getting to the closing table on a home you are buying are greatly increased over a general pre-qualification. That’s why majority of Realtors, both those acting as buyer’s agents and seller’s agents will require pre-approval before they will entertain any business.
Getting pre-approved is worth the time and trouble. Pre-approved buyers get much more attention from sellers, especially when there are other offers on the table. If given the choice between 2 offer, one pre-approved and one that has not been pre-approved (but is a higher offer) many sellers will lean towards the pre-approved buyer, even if the other offer is more! A good pre-approval is not only a license to shop for a home, but it also puts you in the driver’s seat when it comes time to negotiate.
Get pre-approved for a Charlotte North Carolina mortgage now.
This website provides information on FHA and VA loans, in addition to the hundreds of other conventional and jumbo mortgage loans available. As a mortgage loan officer, Ed has proudly served home owners and home buyers in the Charlotte area (including Concord, Gastonia, Matthews, Monroe, Huntersville and Ft. Mill as well as all of North and South Carolina.)
Apply online for your Charlotte area mortgage loan
or call 704-651-8704 for your free mortgage consultation.
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