Getting a Home Loan: Pre-Approval or Pre-Qualification

Pre-Qualified vs. Pre-Approved

 

What is the difference?

You may be wondering if there is a difference between being pre-approved vs. being pre-qualified. It's a great questions, because the terms are often confused and sometimes interchanged, yet there is a big difference.

 Pre-Qualified:  

The term pre-qualified (or pre-qual) is usually referred to the loan officer's written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

Pre-Approved: 

Being pre-approved is a term loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender.

What is best?

Pre-Approval

Why?

Pre-qualification is a lender's best guess estimate on what you can afford. But it's not a guarantee.

Pre-approval on the other hand, is a firm commitment from your lender based on your actual finances. If you know what you want pre-approval can help ensure you get it.

 

We can help you get Qualified for a Home Loan & Get Pre-Approved, so you can Search for homes:

The Bush Realty Group consistently ranks in the Top 5 Teams at Keller Williams Realty Southwest Las Vegas and number 46 of over 10,000 agents in Clark County- Greater Las Vegas Area. The Bush Realty Group is a team of Real Estate Professional in Las Vegas Nevada. Born and Raised in the Las Vegas area with over 17 years experience. In addition to being well-versed in buying and selling homes, The Bush Realty Group has worked with land development, managed new home community projects and commercial land sales and leasing. Presently, Michelle Bush serves at Keller Williams Realty as a Broker/Salesperson. The Bush Realty Group is a group of accomplished Real Estate professionals who prides themselves on providing outstanding service to their clients. Their experience and knowledge allows them to be well rounded in all aspects of real estate transactions. The Bush Realty Group takes care of their clients by servicing them from list to close. For all your real estate needs, please visit The Bush Realty Group at www.LasVegasAreaHomeSearch.com or call 702.483.9620.

www.LasVegasAreaHomeSearch.com

Terminology source: http://www.realestateabc.com/glossary/