I heard it is not. What do you think?
2007-10-31 02:09:29 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Pre-Qualification and Pre-Approval are terms that are used
inter-changeably.
A Pre-Approval "technically" is STRONGER.
Pre-Qualification means that based on what you have "told"
your Realtor or your Loan Officer (about your income and your debts ....) Either one of these individuals can tell you
(based on THAT information) what you "SHOULD" qualify for.
There is No Documentation of your debt or your income with a pre-qual.
Pre-Approval means that "some" documentation has taken
place. The Buyer's credit report has been ran. Bank statements or pay-stubs "may" have been reviewed. And based on THAT preliminary information ... A Loan Officer
can issue a Pre-Approval letter.
Keep in mind, however that a Pre-Approval letter DOES NOT
mean "FINAL APPROVAL."
After you have a pre-approval .... then ... the final approval process begins. Your Loan Officer will submit your file to
"underwriting." The underwriting process is where EVERYTHING regarding your ability to re-pay the loan
is reviewed and analyzed. During this process ... you will
be required to provide additional information such as W-2 forms; your income tax forms (for at least two years back).
You "may" have to provide documentation that a particular
debt has been paid off.
Your employment or "source of income" must be verified and
documented. (Usually pay-stubs and a form-letter completed by your employer will satisfy this)
Once you and your Loan Officer have "satisfied" all issues
(meaning: answered any questions from the underwriters);
and you have submitted ALL documents requested by
the underwriters .... Among the documents needed will be your Purchase Agreement, the Appraisal, and proof of Homeowner's Insurance ... Then your file will be submitted for FINAL APPROVAL.
If all "conditions" that the underwriters have imposed have
been met. (Meaning all documents submitted; income and
employment has been verified) .... Then you will be issued
a FINAL APPROVAL or a "CLEAR to CLOSE."
At that point ... A closing date can be set.
As you can see .... it is "quite" a process .... A Good Realtor,
and a Good Loan Officer should be able to assist you through
the entire process!
Hope that this information is helpful!
2007-10-31 05:37:13 · answer #1 · answered by kjh 3 · 0⤊ 0⤋
They are not the same. Roger explained it pretty well.
Pre-qual means nothing at all. It takes 2 minutes and anyone can do it, including the real estate agent. Pre-approval is better, but with a loan nothing is ever given final approval under well into the contract.
Generally, there are 5 days to apply for financing, another 10 days to get the inspections and appraisal done. While this is being done, the lender is verifying that you owe what you say you owe and nothing more. If there are glitches on your credit that need to be straightened out, this can often be done at that time also. After verifying income and debts, after appraisal and inspections, usually about 5 days prior to closing, the lender will give final loan approval. It's very very important that you not make any large purchases or have a bunch of people run your credit during this time as both of those activities will harm your FICO score and may affect your ability to get your final loan approval.
2007-10-31 03:50:10 · answer #2 · answered by Cristina V 3 · 0⤊ 0⤋
I can pre-qual you here if you were to give me your income and monthly expenses. Pre-qual really isn't any good.
Pre-approval means that the lender has pulled your credit and looked at your income, etc. However, the lender hasn't verified all the information (ie tax returns, etc) This is better, but still not the best. However, some lenders like Wells Fargo will submit your package to underwriting and will be approved subject to conditions that are set forth. This is better.
2007-10-31 02:23:27 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The difference is a pre qual will get laughed at, and a pre approval will be taken seriously. The pre qual means they have not reviewed all your assets and credit.
2007-10-31 10:11:04 · answer #4 · answered by frankie b 5 · 0⤊ 0⤋
Both are very similar, in that you can get either based upon unverified information which you yourself present to a lender. Both are useful to the borrower, in terms of a guideline concerning the amount you might qualify to borrow. Both are also relatively useless to a seller, since none of the information is verified until you actually apply for a loan.
2007-10-31 02:19:25 · answer #5 · answered by acermill 7 · 1⤊ 0⤋
they pretty much the same both just basically qualifies you for the loan and how much you can afford when buying the house...found some great real estate information that you will find useful it may not be for your area but its got some great tips
http://www.beachcitiesrealestateonline.com
http://www.beachcitiesrealestateonline.com/PageManager/Default.aspx/PageID=2039552
2007-10-31 11:17:17 · answer #6 · answered by Pure Genius 3 · 0⤊ 0⤋
It's all b.s. However, most seller's don't realize this . . . so you'll still need it . . . the deal isn't done until the bank releases funds . . . so technically your never approved until the last minute.
2007-10-31 02:23:37 · answer #7 · answered by CHARITY G 7 · 0⤊ 0⤋