Buying Brevard

Brevard County, FL Real Estate and Local Information for Central and South Brevard County, FL specializing in the Melbourne, Suntree, and Viera areas.

What is the Difference Between Pre-Qualified and Pre-Approved for a Loan?

 

What is the Difference Between Pre-Qualified and Pre-Approved for a Loan?

 

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To purchase a home, most people will need to speak with a mortgage banker or mortgage broker to determine how much they can afford to spend by getting pre-qualified or pre-approved for a loan.  The terms “pre-qualified” and “pre-approved” sound as if they mean the same thing, and are often used interchangeably; however, there are important differences that consumers should understand.

 

Getting pre-qualified provides an estimate of the amount you can borrow and the types of loans available to you based on the information you provide.  Pre-qualification can even be accomplished over the phone and at no charge.  You supply the lender with information such as your income, debts and assets, and they will perform a credit check.  Your pre-qualification letter will indicate a loan amount for which you are likely to be approved, but it is not a loan guarantee. The pre-qualification estimate is only as good as the information you provide, but it does serve as a guide to the appropriate price range of homes for you to consider.

 

Getting pre-approved for a loan is more involved, and it provides you with a specific amount you can borrow based on a more thorough review of your financial data.  You begin the process by completing a mortgage application, paying the application fee, and providing the lender with certain financial documents such as W-2 forms, bank statements, and any documentation of your other assets.  The lender will also verify your employment and perform a credit check.  All of this information goes through the underwriting process to provide you with a conditional commitment for a specific loan amount.

 

Getting pre-qualified or pre-approved is only the first step.  I am realtor in Brevard County, Florida and I work with homebuyers every step of the way in purchasing a home, and I look forward to working with you.

 

Laura Forman - Realtor, CDPE, www.LauraSellsBrevard.com (321) 917-2162 

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Comment balloon 13 commentsLaura Forman • January 15 2011 10:50PM
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