Per Qualification Vs. Pre Approval

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If you are in the market for a new home, your first step is pre-qualification. Pre-qualification takes less than eight minutes and lets you know what you can afford when shopping for your house.

What is Pre-qualification?

Pre-qualification is simple and can be done over the phone. It costs nothing and requires only a little information sharing. When you call 1st Residential Funding for a quick pre-qualification, we will ask for general information that gives us an
overall picture of your financial situation, including your debt, income, assets, and credit history. After evaluating this information, we can give you an idea of the mortgage amount for which you qualify to purchase a home. It may or may not include accessing a full credit report.

At this point, as your mortgage loan specialist, we will discuss various mortgage options and recommend the type that might be best suited to your situation. Because it’s a quick procedure – and based only on the information you provide us – your pre-qualified amount is not a sure thing; it’s just the amount for which you might expect to be approved. For this reason, being a pre-qualified buyer doesn’t carry the same weight as being a pre-approved buyer who has been more thoroughly investigated.

What is Pre-approval?

Being a pre-approved buyer makes you a stronger buyer. Once again, there is also no cost involved but it does require a little more effort on your part. You will need to collect the necessary documentation and we will pull a full three-bureau credit report. This gives us all the information we need to generate a loan application (known as Form 1003).

At this point, you still do not have to know what house you are purchasing and yet we can pre-approve you for a certain amount.

With pre-approval, you will receive a conditional loan approval for an exact loan amount, allowing you to look for a home at or below that value. This makes negotiating and “winning” a contract when there are multiple offers more likely since you have actually been pre-approved! You have the stronger advantage and this also allows you to close sooner.

 

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