Are you pre-qualified or pre-approved for a loan?
Before you begin to shop for a new home, you should set up a time to meet with me so we can figure out how much you can afford and what your monthly payment might be. This will help you and your realtor zero in on the right house for you. It is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.

To get pre-qualified for a loan, I will collect information about your debt, income, and assets. Well look at your overall credit profile and and I will give you an idea of the various loan programs that might work for you. I can issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.

To get pre-approved, you will sign a mortgage application and provide me with the information I will need for the lender, verifying your employment, any liquid assets you may have and financial status such as W-2 forms, pay check stubs, etc. Well review your mortgage options and submit your completed application to the lender that best meets your needs. Once the application receives preliminary approval I will provide you and your realtor with a pre-approval letter indicating the amount our lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), your credit score drops, interest rates rise or a specified expiration date passes, your lender must review your situation and may revise your mortgage pre-approval accordingly.