{"id":412,"date":"2013-05-31T17:13:40","date_gmt":"2013-05-31T17:13:40","guid":{"rendered":"http:\/\/bettinasettlesrealty.com\/Blogspot\/?p=412"},"modified":"2016-06-16T17:22:34","modified_gmt":"2016-06-16T17:22:34","slug":"which-is-better-mortgage-pre-approval-or-pre-qualification-letter","status":"publish","type":"post","link":"https:\/\/www.settlesteam.com\/blogspot\/2013\/05\/31\/which-is-better-mortgage-pre-approval-or-pre-qualification-letter\/","title":{"rendered":"Which is better? Mortgage Pre-Approval or Pre-Qualification letter?"},"content":{"rendered":"

\"office_desk\"<\/a><\/p>\n

 <\/p>\n

This is a question I am constantly asked by buyer and sellers alike and when it comes the time to make an offer on a home I always suggested to my buyers to have a pre-approval<\/b> letter ready and not a pre-qualification <\/b>letter before we even start looking at a home.<\/p>\n

 <\/p>\n

There are some key differences between a pre-approval<\/b> and a pre-qualification<\/b>.<\/p>\n

Pre-qualification<\/b> is most of the time done over the phone or online by answering simple questions about the income and credit rating of the potential borrower. Many times the lender will not ask for any qualifying documentations of income and spending.<\/p>\n

The pre-qualification is a determination on whether the prospective loan applicant would likely qualify for credit under a lender’s programs and standards, or a determination on the amount of credit the prospective applicant would likely qualify for.<\/p>\n

Usually a lender will give a determination of pre-qualification usually with in less than 48 hours<\/p>\n

On the other hand the pre-approval<\/b> can take a little longer and it is more complete.<\/p>\n

Lender will ask at the time of application for the last 2 years income tax returns, bank statements, W2\u2019s, etc. You also will be asked about employment and you will have to agree to have a credit report ran. Pending on your personal income, willingness and ability to have a down payment and past credit history it could take up to 4 weeks for you to receive an answer. When approved the lender is willing to give borrower a mortgage commitment letter because the loan has already been submitted to underwriting and they are only waiting for you to find your dream home.<\/p>\n

Difference between Pre-Approval<\/strong> and Pre-Qualification<\/strong>:<\/p>\n

Pre-approval<\/b><\/p>\n

Conditional approval given within 48 hours (average)<\/p>\n

Borrower needs to issue following items after an offer on a home is accepted:<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 W2\u2019s
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2 Years Tax return
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Bank Statement
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Employment verification
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Pay stubs
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Additional documentation if needed maybe due to name change, self-employment etc.<\/p>\n

Home possible needs to pass following inspections:<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Home inspection
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Acceptable title insurance binder
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Certification of clear termite inspections
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Other inspection based on area<\/p>\n

Pre-qualification<\/b><\/p>\n

Conditional approval given within 4 weeks (average)<\/p>\n

Borrower needs to issue following items after an offer on a home is accepted:<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 No change in the applicant’s financial condition or creditworthiness prior to closing.<\/p>\n

Home possible needs to pass following inspections:<\/p>\n

\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Home inspection
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Acceptable title insurance binder
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Certification of clear termite inspections
\n\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Other inspection based on area or lender<\/p>\n","protected":false},"excerpt":{"rendered":"

  This is a question I am constantly asked by buyer and sellers alike and when it comes the time to make an offer on a home I always suggested to my buyers to have a pre-approval letter ready and not a pre-qualification letter before we even start looking at a home.   There are … Continue reading Which is better? Mortgage Pre-Approval or Pre-Qualification letter?<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3,5,9,13,14],"tags":[],"class_list":["post-412","post","type-post","status-publish","format-standard","hentry","category-buying","category-commitment","category-education","category-planning","category-team-work","category-tips"],"_links":{"self":[{"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/posts\/412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/comments?post=412"}],"version-history":[{"count":1,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/posts\/412\/revisions"}],"predecessor-version":[{"id":1801,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/posts\/412\/revisions\/1801"}],"wp:attachment":[{"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/media?parent=412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/categories?post=412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.settlesteam.com\/blogspot\/wp-json\/wp\/v2\/tags?post=412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}