Debunking Mortgage Myths with Aksarben Mortgage
Does pre-approved mean pre-qualified? Is it better to have a mortgage, even a small one, or to buy a home free and clear? How does your credit score affect your ability to purchase a home? Nick Zwiebel and John Major tackle these questions and other topics in a special Mortgage Myths and Facts series.
The first installment of this seven-part series clarifies what loan pre-approval versus pre-qualified means.
Take it away, Nick and John.
“Pre-qualified” and “pre-approved” are NOT interchangeable. When it comes to securing a home loan, it is better to be pre-approved. Here’s why.
Pre-approved is more thorough than pre-qualified.
Pre-qualified means you have spoken to a loan officer and have had your credit checked. That’s it. The loan officer does not have any proof of income, assets, amount of time employed, or any other financial factor that would contribute to your loan approval.
Pre-approval means the loan officer has gathered ALL financial documentation needed for loan approval and has sent this documentation to underwriting for review. The range of your loan is determined by underwriting based on a complete financial picture.
Bottom line: Since buyers are not always fully aware of what can or cannot be counted as income, employment, financial assets, etc., it is wise to consult a loan officer. Become pre-approved sets you up for home buying success!
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