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When you are under
contract to buy a property, it ’s beneficial when
you have your mortgage application already approved.
Here are some terms to become
familiar with:
Pre-Qualification
An informal
discussion between borrower and lender. The lender
provides an amount that is determined by the
information given by the borrower.
Pre-Approval
Loan pre-approval is
a much more rigorous process and is based on
documented and verified information regarding your
employment, income, liabilities, credit and the cash
available to close on the home purchase.
It is not enough for
you to be confident that you can obtain
financing. Completing the pre-approval process
demonstrates your ability to purchase a home. When
more than one prospective buyer offers on a home at
the same time, the buyer who has been pre-approved
for a loan will have an advantage over the one who
has not. A lender’s pre-approval letter is
considerably stronger than a pre-qualification
letter.
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