Here is how a pre-qualification and a loan approval are different.
Not knowing the difference between a pre-qualification and true loan approval can end up costing you thousands of dollars. We’ve helped save hundreds of buyers from making huge, costly mistakes, so today we’ll set the record straight on how these two things are different.
A pre-qualification is simply the initial step in the home loan process where you discuss your financial situation with a loan officer. Nothing is actually verified at this stage.
A true approval is when the buyer provides all the information the lender needs to tell the buyer how much they are approved for and which loan product is the best option. That gives the buyer a better idea of their potential interest rate and monthly payment.
When you go through the entire approval process, the lender will verify your employment history, review your taxes, look at your bank statements, and comb through other documents to verify that you qualify for a loan. It’s essential that you do this before you make an offer on a home, or else you could lose your initial deposit and any money you’ve spent on things like inspections or appraisals.
Don’t fall into the trap of confusing a pre-qualification for loan approval. If you have any questions about beginning the home-buying process, give us a call or send us an email. We’ll walk you through the safest and most strategic way to become a homeowner.
