Pre Approval vs Pre Qualification....Do you know the difference?

Dated: 06/25/2018

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Pre-Approval vs. Pre-Qualification

Why A Pre-Approval Gives Your Buyers the Advantage

 

Even before financing a dream home, PRM helps set your buyers up to win. With our quick and accurate pre-approvals, their offer will get to the top of the pile, giving your clients an advantage over other, unprepared buyers. Let’s break down how pre-qualifications and pre-approvals are different, and what they can do for your clients.

Pre-qualification

Most lenders provide pre-qualification letters, which means they ask basic questions about income and credit along with monthly debts. But a pre-qualification isn’t a deep dive into a buyer's finances; it’s simply a ballpark figure that can help them with their house hunt. It’s important for buyers to remember that being pre-qualified for a certain amount does not mean they are approved for that amount.

Pre-approval

Unlike pre-qualification, the pre-approval process for a home loan is a much deeper dive into a buyer’s finances. In essence, it’s proof that your clients are both willing and capable of buying a home and adds that extra assurance to the seller that the sale won’t fall through.

In the pre-approval process lenders should:

  • Collect a buyer’s earnings history
  • Verify their credit report
  • Examine their assets
  • Analyze current debt levels
  • May contact their employer

This in-depth understanding of their finances gives us an accurate dollar amount of what the buyer is approved for and a better idea of what their interest rate will be. Although not set in stone, pre-approvals are more accurate than a pre-qualification. 

Benefits of a Pre-approval:

  • Buyers know their real budget.
  • Buyers gain better negotiating power.
  • We contact the listing agent on the buyer's behalf to reinforce the strength of our pre-approval letters.
  • We can even provide pre-approvals tailored to a specific property.

HAVE YOU BEEN PRE-APPROVED?  NEED MY HELP? CALL ME TODAY AND LETS START THE PROCESS TOGETHER.

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Susan Bermudez

Originally from Arizona, I moved to Oregon 4 years ago with my family. My husband has been with Ford for over 20 years and when we were asked to fulfill a career opportunity in this beautiful Oregon, ....

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