Pre-Qualified vs Pre-Approved - What First Time Buyers should know!

  

     What is he difference between Pre-Qualified and Pre-Approved?  This question is asked by all First Time Buyers, Real Estate Agents and Investors.  Typically agents and investors want to confirm the buyer as a “good candidate” for getting a loan. They want to know that the buyer has taken the extra steps to become pre-qualified. Lenders pre-qualify borrowers by assessing their risk factors and checking out credit history.

 

     Pre-Qualified is the introduction process of getting pre-approved.  At this point you are generally discussing the overall financial picture, which includes personal debts, income and assets.  After evaluating this information the lender or broker can give an approximate idea of what mortgage amount you the buyer qualifies to receive.

 

     Pre-Approved buyers are ready to buy.  These buyers are waiting for the right price, right home and or condition to consummate the deal.  Lenders pre-approve borrowers by assessing their risk factors, checking out credit reports and asking general questions about income, savings, and assets.  Pre-approval is a lengthy process which requires filling out a mortgage application and placing a deposit on file for the application and appraisal. The lender will verify the down payment and other items needed to confirm financial worthiness. Once the buyer is pre-approved, a detailed analysis of how much home can be afforded; interest rate, down payment, closing cost, and most importantly the approximate mortgage payment amount (P.I.T.I.) will be specified.

 

      Finally, the buyer receives a mortgage commitment in writing for the exact amount of the approved loan.  Having this information allows the buyer to shop much more accurately for properties in their target market.

 

    My First Michigan Home ((MFMH) provides in-depth education to their clients on the process of obtaining Pre-Qualify and Pre-Approval status. Should the client want an approximation of what mortgage payment would be required on a particular home a “Pre-Qualification can be given.  Both services are readily available and offered upon request.  

 

     Providing the ultimate buying experience is our specialty. For more information contact our team of expert Mortgage Representatives at:  www.Myfirsthmichiganhome.com or www.Goodpeoplebruisedcredit.com  for seamless service.

 

Christopher Shaw

CEO