What is the difference between “pre-qualified” and “pre-approved”?
There is considerable difference between being “Pre-Qualified” for a mortgage and being “Pre-Approved.” Generally becoming pre-qualified only requires a brief discussion with a loan officer outlining credit, income, debts and liabilities with no actual verification of this information. Obviously a borrowers picture can change if the information given at the pre-qualification meeting cannot be verified. On the other hand a Pre-Approval actually approves a borrower for a pre determined amount pending only the appraisal of the home selected to purchase. All information about the borrower’s credit history, income, debts, liabilities and work is verified before a Pre-Approval status is given.
Unfortunately the distinction is sometimes blurred, which is why it is vital that you discuss your financing with a reputable and local loan officer before you ever think about writing an offer! In a nutshell, “Pre Qualified” means that you have discussed your loan scenario with a lender who has checked your credit and asked you about your income, assets and employment history and told you what mortgage amount you can qualify for. Being “Pre Approved”, means that the loan officer has investigated your credit, employment and available funds more thoroughly and has run your scenario through an underwriting process to ascertain exactly what financing your are “Approved” for. With today’s automated underwriting systems, this need not be an overly long process. I have an extensive background in residential lending and would be happy to walk you through the process, call me at (626) 354-8000, as a first step you might want visit my mortgage website for more information.
