Pre-Qualification Vs. Pre-Approval | Mint Hill Time

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CHARLOTTE – Did you know there’s a difference between being prequalified and preapproved for a residential mortgage? In this market, it is absolutely essential to ensure that your financing is full pre-approval and not just pre-qualification.

A pre-qualification is based on a quick and informal conversation with a lender or by completing a brief online application. This information is solely based on the information given without consulting the additional documents. This type of “qualification” leaves room for errors, and for sellers to ask: are they really approved for financing? Moreover, if one has to invest non-refundable money in a transaction with only pre-qualification, one risks losing money if the documents do not match the casual conversation.

In contrast, a pre-approval includes one key step in the process: Documents! A pre-approval is similar to getting started: having a conversation, completing an online application, but then providing those essential documents. The documentation needed depends on your specific wants, needs and circumstances. With a pre-approval, your lender will use the documents/applications provided and determine a firm amount they will provide. Going one step further, a pre-approval shows real estate agents and sellers that you have financing fully in order, giving them the confidence to accept your offer. Many agents and/or sellers will not accept any offers without full pre-approval.

Navigating this market can seem daunting, but with expert guidance and preparation, it can be made simple and effective! Expect to cover “How to Stand Out in a Seller’s Market” next week!

As always, please do not hesitate to contact me with any questions relating to residential mortgages of all things (704) 430-6138 [email protected]

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