What is the difference between pre- qualify and pre- approval? Which do you do first and when do you do it?

Asked by Carrie, Williston Park, NY Sat Mar 23, 2013

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Anna M Brocco, Agent, Williston Park, NY
Sat Mar 23, 2013
When shopping for a home, be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously. Generally a pre-approval means that the lender is ready to make the mortgage based on the information/documentation provided at the time; whereas a pre-qualification generally is an estimate of how much can be borrowed based on your information.
2 votes
Malgorzata R…, Agent, Rockville Centre, NY
Thu May 29, 2014
Getting pre-qualified is the initial step in the mortgage process. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluation a lender can give you an idea of the mortgage amount for which you qualify. Pre- qualification can be done over the phone or internet, and there is usually no cost involved. The initial pre-qualification step allows you to discuss any goals or needs you might have regarding your mortgage with your lender. Getting pre-approved is next step. you will complete an official mortgage application, pay fee, and than supply the lender with the necessary documentation to preform an extensive check on your financial background and current credit rating.With pre-approval , you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for home at or below that price level.
Good Luck
1 vote
Roswell Moore…, Mortgage Broker Or Lender, Scottsdale, AZ
Sat Mar 23, 2013
Hi Carrie,

Great question! Seek Pre-Approval...

What's the difference between Pre-Qualification and Pre-Approval?

Pre-Qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment, etc. All of these factors will then be analyzed to determine your loan eligibility.

Pre-Approval (better) is written documentation that shows you have the support of a lender who is willing to finance you. It means our underwriter has reviewed your loan application. Based on your income, debt ratio and savings, the underwriter provides the dollar amount you are eligible to borrow. Now you can shop around for houses that fit into that loan amount category.

Here is the nice thing about being Pre-Approved: It gives you the advantage to shop as a cash buyer! With a Pre-Approval in hand, you now have the power to negotiate. The seller will take your offer much more seriously knowing you are already approved by a lender. Pre-Approval can also shorten the time it takes to close, making even a lower bid more attractive to sellers who are seeking to move quickly.

Good luck on your new home purchase!

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct
Roswell.Moore@cox.net

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required), HARP 2.0 - No Appraisal Required for Refinance for Underwater Home Values, HomePath, Investor Friendly (10 financed properties), VA, VA Refinance loans (NO appraisal required on IRRRL loans), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!
1 vote
Are you authorized to do Home purchase loans in NY
Flag Sat Aug 17, 2013
onguo4, Home Buyer, Franklin Square, NY
Mon May 26, 2014
bull you don't need a pre anything just another game banks and realtors play. Get a pre-approval and its only good for one week to 30 or 60 days . The process takes minutes to fill out so why the bull . Just another tactic to play with your psyche, leaves you no time to shop around and leads you to a possible quick decision on the first few homes you look at that you'll regret. Don't be bullied ! Knowledge is power ! Notice the responses here area from bankers and agents .
TC , 30 yrs experience buying ,building, selling.
0 votes
Malgorzata R…, Agent, Rockville Centre, NY
Wed Mar 26, 2014
Getting pre-qualified is the initial step in the mortgage process. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluation a lender can give you an idea of the mortgage amount for which you qualify. Pre- qualification can be done over the phone or internet, and there is usually no cost involved. The initial pre-qualification step allows you to discuss any goals or needs you might have regarding your mortgage with your lender. Getting pre-approved is next step. you will complete an official mortgage application, pay fee, and than supply the lender with the necessary documentation to preform an extensive check on your financial background and current credit rating.With pre-approval , you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for home at or below that price level.
Good Luck
0 votes
Nina Harris, Agent, Williston Park, NY
Sat Mar 23, 2013
With a pre approval you can put in an offer that will be taken seriously due to all the proper documents having been presented. A pre-qual is looked upon as hearsay and you can get this on the phone. A pre qual does not have the same strength as a pre approval. Bypass the prequal and get preapproved if you are seriously thinking of purchasing a home.
Inventory levels are very low and you don't
want to miss out because you didn't have the proper credentials.
0 votes
Gail Gladsto…, Agent, 11743, NY
Sat Mar 23, 2013
Carrie,

I am so glad somebody finally asked this question.

Pre-qualify: go on the internet or call an 800 # or any other contact. They run your credit, ask how much you make and how much you owe and you get a pre-qual.

If you came to me or any of my agents with a pre-qual, we would send you for a pre-approval before working with you. When I sold a property in Astoria, I would not allow anyone but buyers with full pre-approvals to enter our doors.

Pre-approval: You will need to supply 3 years of income tax returns, 3 months of pay stubs, 3 months of bank statements and everything gets verified. You are now as good as a cash buyer and your commitment will only be contingent upon an appraisal of the property and a contract.

Any further questions, feel free to call or write; happy to assist.

gail@GladstoneGroupRealty.com
516-368-8828
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sat Mar 23, 2013
Carrie, you want to meet with a Loan Officer and get pre-approved. This means that you met with a Loan Officer and allowed him/her to review your credit, income & asset documentation. This is how the lender is thoroughly able to qualify you. This is the FIRST step in the home buying process.

This will allow the Loan Officer to address all your questions and present you all your mortgage options, get an idea of what your home buying budget is and what the estimated payments would be, etc. it's very important that you know what you can realistically afford and incorporate the estimated mortgage payments into your real life budget so that outside of what the lender approves uou for, you can determine what you're comfortable paying every month towards your new mortgage. Get your financing in order and go from there.

If you're in need of a good Loan Officer to help you, my offices are located in Woodbury. We're direct lenders and an actual bank. Good luck!

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
0 votes
Josh Barnett, Agent, Chandler, OK
Sat Mar 23, 2013
The same, but if you can get "underwriting approval" BAM you are golden.
0 votes
Thomas Brady, Agent, Plainview, NY
Sat Mar 23, 2013
Do a pre-aprroval before you begin searching for a home. There is nothing worse than shopping for a home, finding the perfect house and then being told it's out of your price range. Conversely, maybe you can afford more than you think, either way knowing is better than guessing. In order to put in an offer you'll need a pre-approval so there is no time like the present. If you need a list of lenders, or have more questions please feel free to e-mail me at your convenience.
Thank you and good luck.
Tom Brady SFR, e-PRO, SRES, GREEN, BPOR
Licensed Real Estate Salesperson
Notary Public, Retired N.Y.P.D. Lt.
631-682-8660
Tom@BradyFamilyRealty.com
http://www.BradyFamilyRealty.com
#1 Listing & Selling Brokerage Office on Long Island
Charles Rutenberg Realty, Inc.
255 Executive Drive - Suite 104
Plainview, New York 11803
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