What is the difference between a pre qualification and mortgage pre approval

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Home Mortgage Application

When you are buying a home financing can seem complicated. In Kansas City real estate purchase offers must include a pre-approval letter. In some parts of the country sellers require the real estate agent to have a pre-approval letter on file before the agent is allowed to show a property.

The first option is a mortgage pre-qualification which helps you to understand how much home you can afford.

The second is a mortgage pre-approval letter which lets the seller know how much home a buyer is qualified to purchase. Most importantly, it lets them know that a buyer can follow through on the transaction. If a seller takes their home off the market they want to be sure that the buyer is financially able to close.

MORTGAGE PRE-QUALIFICATION –
Provides a ballpark estimate of your buying power.
Is based on summary information of your assets and income.
Requires a satisfactory review of property, financial documents and program requirements to issue final approval.
Is offered by most lenders.

MORTGAGE PRE-APPROVAL –
Provides proof to real estate agents and sellers you are pre approved for specific loan amount.
Is based on verification of your income, credit and assets.
Require satisfactory appraisal and title review. No change in financial condition for final approval.
A good mortgage lender offers this service at no cost before you find a home.

A pre-approval letter or pre-qualification does not commit you to a particular lender. A purchaser can change lenders up until about two weeks before the closing date. It really depends upon the time at lender takes to prepare the documents and have the appraisal done. Under new regulations three weeks would be a reasonable time frame for any good lender to close.

Give us a call or contact an experienced mortgage lender. The mortgage lenders we work with have over 20 years experience in the mortgage industry and constantly stay up on the latest government regulations. Typically if you just walk into a local bank branch that person does very few mortgages and may not have the experience to make it in an easy process and close on time.

There are a lot of people involved in closing a transaction, the buyers, the sellers, the mortgage professionals, the title companies, movers, and utility companies. When the transaction does not close on time it is a major inconvenience for the buyers and sellers. There is enough stress in moving that nobody wants to add more.  Home  Spot Choice takes on time closings very seriously.

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