Common Questions: Pre-Qualified vs. Pre-Approved

After this many years in the lending business, we’ve learned that most people have a whole list of questions about each aspect of the home buying process. From pre-approval to down payments to credit scores, there’s a lot to cover. So we decided to pull the whole team together to tackle these big topics that we get asked about all the time.

This week we’re excited to introduce you to the main man in charge, Dan Conley. He’s the Branch Manager here in our Redding office, and he is a seasoned expert at guiding people through the home-buying process.

What is the difference between being pre-qualified and pre-approved?

There’s actually a huge difference between the two. Getting pre-qualified is the first step, and it’s very simple. You submit your financial information to your lender, and they will evaluate it and then qualify you for a loan of a certain amount. This is just an estimation, and not an actual commitment from the lending company.

Pre-approval is the next step, and it’s much more official than the first. This means that your information (assets, income, etc.) has been officially submitted to underwriting.

By this time we actually have a full commitment for an exact loan amount. Pre-approval shows the seller that you’re serious about buying and ready to make the purchase.

What is the right way to get pre-approved?

In order to get pre-approved, you’ll need to fill out an official application and obtain your credit history from a service provider. With the official information you included in the application (assets, income, personal information, etc) and access to your credit information, the lender will determine an amount that you’re officially approved to borrow.

Your lending officer will walk you through each step in this process and make sure that you’re well-informed every step of the way.

What is the benefit of pre-approval?

Once you’re pre-approved, the whole process becomes easier and quicker. You can do a very rapid close because the only thing needed is an appraisal. We encourage everyone to get pre-approved because it’s more official, it alleviates a lot of stress, and it can get you inside your new house sooner!

Hopefully this interview with Dan has answered your questions and left you feeling more prepared to move forward in the homebuying process. Pre-approval can sound complicated at first, but we’re here to make it as simple as possible for you. If you’re ready to get started with the process of pre-approval, we would love to sit down with you and discuss the homebuying process with you. Click on the link below to set up a free consultation.

Ready to take the next step? Request a free consultation today »

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