What is the difference between pre-qualification and pre-approval? Do I have to have a property to apply for a home loan?
A. The terms Pre-Qualification and Pre-Approval are often confused with one another. Pre-Qualification is the Loan Officers opinion of your maximum purchasing power under different loan options based on the income, savings, and credit history information you provide. Pre-Approval is First Security Mortgage Corporations formal decision to grant a mortgage loan based on the verification of the details provided in your completed application and credit report before youve actually selected a home. It is not necessary to have selected a property before you complete a Pre-Qualification or apply for a Pre-Approval. After obtaining your Pre-Approval, you are in a better position to negotiate an offer to purchase a home. You, the buyer, have the increased leverage of a cash buyer, because your mortgage loan approval is already in place. The Pre-Approval letter clearly states that you are approved for the purchase of that home.
Related Questions
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- What is the difference between pre-qualification and pre-approval? Do I have to have a property to apply for a home loan?
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