What Is A Pre-Approval?

A pre-approval is a written, conditional commitment from a bank or a mortgage lender that says you are pre-approved for the mortgage financing in question.

It comes only after filling out a loan application, supplying verified income, asset, and employment documentation (assuming these items are necessary), running credit, and underwriting the loan file.

Acquiring a pre-approval shows the interested parties (sellers, agents) that you’re a committed buyer, boosting your chances of sealing the deal at the price you want. It will also show you how much house you can afford, not just an estimate.

Pre-Approval Requirements:

• Credit report
• Bank statements
• Pay stubs
• Tax returns

Once you provide all the required documentation and get the pre-approval letter from a bank or lender, it is typically valid for 60-90 days. Just note that things can change during that time, such as your credit score, so it’s not 100% guaranteed.

As you can see, being pre-approved and pre-qualified are not the same thing, so make sure you know the difference before shopping for a home.

For more information about this subject and about loan questions please contact Frank Marta Texas Home Loan Specialist. Info@nuhomegroup.com or give us a call (713) 373-0345

NuHome Group 713-373-0345

1445 North Loop West Suite 105 Houston, TX 77008

Frank Marta NMLS# 245813/835196

What Is A Pre-Qualification?

If you choose to finance the home purchase with a mortgage, you’ll need to get pre-qualified first. A “pre-qualification” isn’t as robust as a pre-approval, but it’s a good first step to ensure you can purchase the home you desire (or any one at all).

A pre-qualification is a pretty straightforward, simple check to see what you can afford based on your income/debt levels (debt-to-income ratio), assets, down payment, employment history, perceived credit score, and so on.

You can get pre-qualified very quickly and easily with a bank or mortgage broker, but it won’t carry much weight in the eyes of the agent or the seller.

After all, with a pre-qualification you’re simply supplying estimates and your credit report probably hasn't yet been run (though it should be pulled early on in the process). That said, a pre-qualification, or pre-qual, is just a determination of what you’d likely qualify for if you made an offer and applied for a home loan.

It’s not necessarily a waste of time, but it’s not going to get you very far.  You can liken it to running a few numbers to see where you stand, but it cannot be used in place of a pre-approval.

 For more information about this subject and about loan questions please contact Frank Marta Texas Home Loan Specialist. Info@nuhomegroup.com or give us a call (713) 373-0345

NuHome Group 713-373-0345
1445 North Loop West Suite 105 Houston, TX 77008
Frank Marta NMLS# 245813/835196