Mortgage Prequalification versus Mortgage Preapproval

What’s the Difference Between a Mortgage Prequalification versus Mortgage Preapproval?

Mortgage Prequalification versus Preapproval: What’s the difference? There are definitely several differences worth learning about before buying a home.

Home Financing Prequalification’s and Pre-Approvals Are Not the Same

Mortgage Prequalification versus PreapprovalWhile many real estate agents and their clients use the terms pre-qualification and pre-approval interchangeably, they are very different in practice.

They are also very different to the home seller and their agent when deciding whether or not to accept your offer.

It will do you no justice to JUST have a pre-qualification letter.

Getting a Home Mortgage Prequalification Letter from a Qualified Lender or Broker

Getting just a Prequalification Letter involves providing basic information to the lender. This is a good start, but it’s not enough.

Also, in return, getting a letter stating the maximum loan amount that the home buyer should be able to afford. But this process does not nearly dig deeply at all and will be noticed by the seller and their agent.

Dig Deeper and Get a Home Financing Pre-Approval Letter

There is lot more that can, should and needs to be done upfront to get a loan pre-approval letter and information in order to really know where you stand before making an offer on a property.

This gives you so much more leverage when negotiating an offer when buying a home. Skipping this process could easily cause delays in closing your loan.

Getting a Home Loan Financing Pre-approval Letter (PQF) from a Qualified Lender or Broker

On the other hand, getting a preapproval letter from a qualified, experienced and licensed Mortgage Broker involves providing documentation to support that information, as well as passing a credit check.

How and Why to Choose Your Lender Wisely

To have a skilled lender and mortgage broker on your side who will make certain your home loan closes is not only comforting, it’s imperative. It’s super crucial to choose your lender wisely. This can be the difference in a successful closing or not.

Completing an entire application package for Homebuyers

Homebuyers complete an entire application package, supplying pay stubs, tax returns, bank and investment account statements, and perhaps other paperwork like divorce decrees, business licenses, canceled checks and more. This upfront effort makes the rest of the process much more simplified.

Get Your Loan Underwritten Upfront

The whole package is actually processed and underwritten upfront. And if approved, the borrower should be able to purchase any property that meets the lender’s requirements.

From Mortgage Application Prequalification to Mortgage Approval

The road from mortgage application to mortgage preapproval can be blocked by many unexpected problems. For example, possible errors on your credit report or questions about that second job. Or, maybe a bounced check that’s showing up on a bank statement.

Resolve Potential Home Financing Issues Upfront When Getting a Mortgage Pre-Approval

Going through the pre-approval process allows mortgage applicants to resolve these issues without the added pressure of being in escrow with a closing date hanging over their heads.

It’s very important and time saving to go through the process of getting preapproved versus prequalified

This saves a lot of time and potential stress. Also, the Seller’s agent and the Seller will be a lot more inclined to take your offer seriously knowing you are educated and prepared. Plus, they like to see that you have been scrutinized by a mortgage lender and serious enough to buy their home.

Arizona Contract Law For Home Loan Pre-Approvals

Additionally, Arizona contract law states that a pre-approval letter MUST be submitted with all Purchase Contracts or delivered within 24-hours. I don’t like to wait 24-hours. I like to submit an entire, beautiful package all at once, that I put together.

Put yourself back in the seller’s shoes for a moment. Wouldn’t you want buyers to have a letter like this if you were selling your home?

Your Real Estate Agent Should Guide You Into a Home Financing Pre-Approval

It is so important to hire an Real Estate Agent who knows about home loan financing in order to help you get pre-approved for financing a home loan. If he or she is not extremely knowledgeable in tis area, you may want to consider an agent who is.

There’s a lot that goes into buying a home and approaching the process correctly, thoroughly and with a plan.

And, it’s equally important to have an agent representing you who is ethical to all parties. Many are not. You may want to check out my client testimonials to see how I go to great lengths in helping my very happy clients.

No Obligation Consultation with Laura B REALTOR®

If you are interested in a free consultation to see if buying a Phoenix home is a better option for you and get pre-approved for a home loan, please call or email me today.

You’ll be surprised at what you learn. Additionally, I have access to programs that offer down-payment assistance with money you do not have to pay back.

Buying or Selling a Home In Phoenix?

Whether you’re buying or selling a home in Central or Downtown Phoenix, or just have some questions about anything at all in or about any one of the historic districts in Phoenix, I’ll be very happy to help you! Just call 602-400-0008 or email me anytime.