Today we’re going to talk about the difference between being pre-qualified and being pre-approved. I get this question a lot, so I figured I’d answer it for you.
A pre-qualification means that a lender has pulled your credit, examined your documents, and submitted an automated online approval with Fannie Mae or Freddie Mac.
A pre-approval contains all of the above, plus we submit the file to an underwriter. The underwriter looks at everything, asks for clarification, and makes a decision on whether you can afford a home or not. Once you’re pre-approved, you know exactly what you can afford.
If you’re a buyer in the market and out there making offers, a pre-approval shows sellers and their Realtors that your approval is firm and that you actually can afford the home. It’s a really important thing, especially in today’s market where multiple offers are common.
A pre-approval might take a few days longer, but it can save you a lot of trouble. If you have any questions for me or need more information, don’t forget that it doesn’t cost a penny to talk. I’d love to hear from you. Just give me a call or send me an email today.