Pre-Qualify vs Pre-Approval vs Final Approval
PRE-QUALIFY:
Pre-qualification is based on INFORMATION only and is actually the most important of the 3 steps toward a Mortgage Loan closing. I receive many calls like; "Depending on your rates, I may like to get pre-qualified." No one can accurately answer the "rate" question without first Pre-Qualifying the potential buyer. If you are looking for a "fast quote" be prepared for changes without answers to the following:
1. What is the Purchase Price or price range you're looking in?
2. Will you be putting any Money Down?
3. What is your Gross Monthly Income?
4. What is your Gross Monthly Debt?
5. Do you know what your 3 Credit Scores are?
6. Will you Occupy the home you purchase or will it be a 2nd Home or Rental?
7. Do you now own or have you owned Other Real Estate?
8. If a Refinance, what is the Value of Your Home?
9. If a Refinance, how much do you Owe on the property?
10. Have you made any Recent Credit Purchases?
PRE-APPROVAL:
A pre-approval is based on INFORMATION applied to an application AND your CREDIT REPORT. The pre-approval is only as good as the accuracy of the information provided. A pre-approval letter can be provided to your Real Estate Agent to let the seller know you are a "serious" buyer. Note: Pre-Qualification and Pre-Approval are at times used synonymously in the industry.
FINAL APPROVAL:
Once all information on the Application has been verified, Credit issues have been satisfied, Title Search has been completed / approved and the Appraisal has been performed to the lender's satisfaction the loan will have Final Approval status and is ready to schedule for closing. All of these factors are performed with the "Closing Date" listed on the Offer and Acceptance in mind when associated with purchasing property. E-mail is a very valuable tool to stay on top of your loan. By utilizing E-mail, your Loan Officer can keep You, your Real Estate Agent and Title Company up to date with progress reports.
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