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pre-qualification is
normally issued by a loan officer, who, after interviewing you, determines
the dollar value of a loan you can be approved for. However, loan officers
do not make the final approval, so a pre-qualification is not a commitment
to lend. After the loan officer determines that you pre-qualify, he/she then
issues you a pre-qualification letter. This pre-qualification letter is used
when you are making an offer on a property. The pre-qualification letter
indicates to the seller that you are qualified to purchase the house you are
making an offer on. Pre-approval
is a step above pre-qualification. Pre-approval involves verifying your
credit, down payment, employment history, etc. Your loan application is
submitted to an underwriter and a decision is made regarding your loan
application. If your loan is pre-approved, you are then issued a
pre-approval certificate. Getting your loan pre-approved allows you to close
very quickly when you do find a house. A pre-approval can help you negotiate
a better price with the seller, since being pre-approved is very close to
having cash in the bank to pay for the house! |
