Pre-Qualification vs. Pre-Approval

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Confusing Pre-Qualification and Pre-Approval could be the difference between getting the house of your dreams or seeing someone else get the house of your dreams. Let us help you learn the difference!

Pre-Qualified

What is it?

The first step in the mortgage process. A bank or lender reviews your financial state based upon information that you provide them. Once your debt, income, and assets are evaluated, the lender will give you an idea of what you will qualify for.

What it’s not

A pre-qualification is not an exact representation of the loan amount you will be approved for. It does not include an application process, and your credit is not reviewed.

Purpose

The purpose of pre-qualification is to begin the conversation of homeownership. It allows you to get an idea of how much home you can afford given your current financial landscape.

How to get pre-qualified

Pre-qualification can happen in person, over the phone or online. If you need help finding a qualified lender give us a call at (615) 933-1000.

Pre-Approval

What is it?

An application process that allows a mortgage lender to give you the exact amount of mortgage loan that you can qualify for.  It involves an in-depth review of your financial landscape – credit, income, debts, assets, employment situation, etc.

What it’s not

Pre-approval is not a guarantee or a commitment, it tells you what you’ll likely be approved for. The amount you are approved for is dependent upon clearing the underwriting process. As long as your information is valid and your financial state does not drastically change from the time you get approved to the time you close, then the approval amount will stand.

Purpose

The purpose of getting pre-approved is to show your commitment to buyers and stay competitive in a hot market. In the eyes of the seller, a pre-approval is just as qualified as a cash offer.  It is the closest you can get  to a guarantee

How to get Pre-Approved

Call a lender and get set up with a loan officer. Your loan officer will have you complete a mortgage application that will require you to submit proof of income and assets. The lender will pull your credit score and process your application. Once processed, you will receive a letter stating the amount for which you are approved. If you need help finding a qualified lender give us a call at (615) 933-1000.


Getting pre-qualified and pre-approved will show sellers you mean business, and help you get ahead of the competition. To learn more about the homebuying process, give us a call at (615) 933-1000, or reply to this email to get connected with a real estate professional.

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