Pre-Approval verses a Pre-Qualification, what is the difference when purchasing a home?
As of late I have been speaking and meeting with several home buyers that have been pre-qualified with other lenders. Once I got to know my client better and requested that they send over the pre-qualification letter to me so I can see what the other lender issued them I was shocked on how the letter was drafted.
The letters did not have what program the buyer applied for like FHA, VA, USDA or Conventional, did not state weather is was a fix or adjustable rate, did not state what property type like single family home, Condo/Townhome, Units or manufactured home, did not state loan amount to let the buyer’s agent or the selling agent know what the down payment amount the buyer is going to do, did not state credit scores, did not state when the pre-quailifaction letter expires and many other items were wrong on the letter.
So I dug deeper and ask what paperwork you supplied to the lender to obtain this letter, the typical reponse was, “I have them information over the phone and they ran my credit and then sent me this letter” or “I answered a couple questions on line that took about 10 minutes and it sent me a letter”. I was floored to say the least that this was happening.
Purchasing a home is not like buying a car, there are many more steps when you are looking to purchase one of the biggest ticket items that you will have in your life and answering a couple questions and running your credit is not the proper way to go about it.
All the professional licensed agents that I have the privilege to work with, will in no way except a pre-qualifcaiotn letter from you, because they know it takes many more steps and additional paperwork to obtain the proper documentation to submit to the seller with your offer. You will want to submit a very strong offer with all the supporting documentation so there is no question that you are the better pre-approved buyer for the home.
I have been in the mortgage industry since 1988 and I have closed many happy home owners over that time because I take the process of purchasing a home serious. The last thing I want to happen is for you receive a phone call 3 weeks in the loan process that says you do not qualify to purchase a home. That is way I gather as much supporting documentation upfront so we can address as pit falls right then and there, not during the processing the loan so that I can issue a pre-approval letter which is strong than a pre-qualification letter.
You will do yourself a dis-service not supplying the proper paperwork upfront like income, credit, assets and other items to have a complete pre-approval loan package. You can not get that by just running credit and answering a few questions on line, not a good idea because something in the income, credit or assets may require additional explanation that can be corrected at the start of your home search verses in the process of your loan.
My goal on every home loan transaction is to make the process of purchasing or refinancing a home as smooth and stress free as possible for you and everyone else involved, it takes a lot of employees and experience to fund a loan today, that is what I bring to the table. The agents I work with know once I submit a pre-approval letter, that letter is good as gold.
I find that 95% of my clients have no problem suppling the paperwork to me because they have heard stories from family, friends and co-workers that received that phone call that they do not qualify to purchase a home because something came up. From my experience and investigation of the reasons they could not purchase all stemmed from the very beginning, they were ALL issued a pre-quailfication letter.
That told me that they were not working with the right team of professionals to assist with their home purchase. It is not that simple to purchase a home by just running your credit and answering a few questions over the phone or on line. To save the stress of worrying about the loan process when purchasing a home, work with a properly licensed mortgage professional like myself to guide you through the chopping waters of the lending industry and have a pre-approval letter in hand when you start your home search.
Lets get started toward the path of homeownership by contacting me directly at 909-503-5600
by Nathan Rufty