Getting PRE-QUALIFIED vs. PRE-APPROVED

The very first step in buying a house is getting pre-approved by a lender.  Some lenders offer you a pre-qualification letter while others offer you a pre-approval letter.   

What’s the difference?   

A pre-qualification refers to less rigorous assessments, while a pre-approval can require you to share more personal and financial information with a mortgage lender. 

When looking for a lender, you need to find someone you trust!  You should ask them about special programs you may qualify for and if they will issue a pre-approval letter after going through upfront underwriting.  What is upfront underwriting? 

The underwriter(they work with the loan officer) reviews all your documentation to get you pre-approved (just like in the traditional loan process), but they do it upfront — hence the name. This process is much quicker than traditional underwriting, which can sometimes take weeks of back-and-forth between you and your lender. 

On average, it should take 1 to 2 weeks to complete the process for a fully underwritten pre-approval letter from a mortgage lender.  Some mortgage lenders may refer to this type of approval as a verified approval or certified approval.

I strongly encourage all my buyers to speak to local lenders instead of these 1-800 lenders or internet lenders.  Just like we want to “shop local” to help our hometown businesses, it is usually best to use a local lender.   I have had buyers in the past, be a week out or even days from closing, and be denied a loan because the lender did not do upfront underwriting.  Those buyers had already paid for inspections, appraisals, and title work, and they lost valuable time!

Do yourself a favor and get that pre-approval that has been through underwriting to show the seller of your dream home that you mean business!!!