Every once in a while, I fall down a statistical rabbit hole. And today was one of those days. I had another agent who was trying to figure out how to explain to their client about why the low
Pre Approval vs Pre Qualification....Do you know the difference?
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.
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.
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.
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, ....