Real Estate Buyers - PreApproval vs. PreQualification, Knowing the Difference

JoJo on Apr 18th 2007

Identify your property price range and strengthen your bargaining power by understanding the difference between these two tools. 

While a pre-qualification provides you and with a “ballpark” estimate of your power, it’s only as good as the information provided.  A pre-approval is backed by verification of your income, credit, and asset information.  It allows you to know what homes you can truly afford and greatly strengthens your negotiating power, especially in multiple offer situations. 

.

When you’re ready to write up that purchase offer, most sellers today require a pre-approval letter from your lender be submitted with the offer so they know they are receiving an offer from a qualified buyer.  If there happens to be multiple offers, you stand a stronger chance of getting the home if you have the pre-approval letter and the other party does not.

.

If you’re a real estate buyer in the South Orange County areas of Laguna Niguel, Aliso Viejo, Laguna Hills, Mission Viejo, Lake Forest, Dana Point, San Clemente, San Juan Capistrano, Laguna Beach, Corona Del Mar or Newport Beach, call or email me for more information on the pre-approval process.

Pre-Qualification
 

  • Provides an estimate of your client’s buying power
  • Is based on summary information your clients provide about their income and assets
  • Requires satisfactory review of property, financial documents and program requirements to issue final approval
  • Is offered by most lenders

Pre-Approval
 

  • Provides proof to other agents and sellers that your clients are pre-approved for a specific loan amount
  • Is based on verification of your client’s  income, credit, and assets
  • Requires satisfactory appraisal and title review and no change in financial condition for final approval
  • Is offered by my mortgage broker, First Capital, as a service to you and your clients at no cost

Filed in Mortgage News | No responses yet

Trackback URI | Comments RSS

Leave a Reply