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This article clarifies two terms
borrowers often confuse - mortgage pre-qualification and mortgage
pre-approval.
Pre-Qualification
A pre-qualification will give you a general idea of the mortgage
loan amount you qualify for. It is an excellent tool for someone
in the preliminary stage of taking action such as first time home
buyers and those thinking about "moving-up". It's easy
and quick to get pre-qualified.
A pre-qualification is based on your income,
credit, total debt ratio (total long term debt compared to the value
of what the loans are for). For those considering a refinance or
home equity loan the value of the property is also a factor.
You will get an educated assessment of the loan
amount you will likely qualify for from your loan officer. Mortgage
Master Service Corporation offers a free, no-obligation consultation
in person or by phone with a lending expert or use the convenient
online pre-qualification form.
You'll receive your pre-qualification within 24 hours on business
days.
Pre-Approval
A pre-approval gives you an accurate indication of the loan amount
you qualify for. A pre-approval is based on validation through
documentation, property value and stated loan terms including
the type of loan, interest rate and program. Getting pre-approved
involves completing some paperwork, takes a few days longer to get
and carries more weight than pre-qualification.
Pre-Approval is for the more serious shopper
who may be working with a real estate agent in search of a home.
Most agents require a pre-approval letter from your loan officer
before showing you homes. It assures sellers you are serious and
can qualify to purchase their home. It gives your real estate agent
more bargaining power when more than one offer is submitted on a
home you put an offer on. It's a form of security for both you and
the seller.
Your documentation including your current income,
credit and total debt-ratio status is given to an underwriter and
submitted through automated approval engines FHLMC/FNMH. Once an
approval answer is received from either of these engines the borrower
is approved subject to your employment and credit status during
the application process, and also subject to a satisfactory property
appraisal and title report. Any misrepresentation in the loan application
or adverse change in financial position may void a pre-approval.
At Mortgage Master Service Corporation you will
receive a pre-approval letter within five business days of applying.
You can apply free online, in
person or by phone for a no-obligation
pre-approval.
[Dealing
with Credit Score Challenges] [Learn
About Credit Remediation]
[Good Credit Translates into
Lower Interest] [The Truth About Home
Appraisals] [Interest Rates]
[Mortgage Rates] [Learn
the Five Factors of Credit Scoring]
[Return to Articles page]
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Mortgage Master Service Corporation
24909 104th Ave. S.E., Suite 100,
Kent, WA 98030
Phone: 253-859-5300 Toll Free: 800-583-7200
Fax: 206-382-9612 (Seattle line)
Email:
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