Loan Pre-Approval Vs Loan pre-Qualify
Do you have a pre-qualification letter or a pre-approval letter from your loan officer?
There is a big difference between these letters and here are some main aspects:
Pre-approval: You can read your "loan estimate borrower worksheet", which is a three-page document with all the details about payments, interest rates, and additional fees.
-Pre-approval: The lender runs your credit report so you can make improvements and corrections if need in order to obtain a better interest rate.
-Pre-approval: You can budget because you know the estimated monthly payment and out pocket cash, you will need at closing.
-Pre-qualify: You have an idea based on your income and debt for how much you can obtain loan approval, but nothing is confirmed yet until all the facts are collected by your loan officer.
-Pre-qualify: There is no credit report run yet therefore you will not receive a loan estimate sheet, and you can't make corrections on credit card charges mistakes if there is one.
-Pre-qualify: You are not prepared to submit an offer if you find the house you want to purchase and your offer will look weak compared to a prospective pre-approved buyer.
If you are serious about purchasing a home you will be in a better position if you are pre-approved, keep handy current bank statements, pay stubs, and avoid having inquiries on your credit or making major purchases.