Pre Qualified Vs. Pre Approved is your buyer really able to make an offer?

Your client found the perfect house, they've spoken with your lender, they've even given you a pre qualification letter, but are they really approved?

Contacting a lender and getting pre qualified for a mortgage usually consists of not much more than a five minute conversation and a review of the borrowers credit report by the loan officer. What does this mean to you as a Realtor? It means your clients application for a mortgage has not been reviewed by an underwriter, checked against the lenders guidelines, or verified any of their income, assets, or employment that they verbally disclosed during their time of application with the lender.

Getting pre approved by a lender involves providing the lender or loan officer with a combination of some of the following documents that pertain to the borrowers specific loan scenario: signed loan application and disclosures, pay stubs, tax returns, W2's, bank statements, drivers license, divorce decree, child support verification, etc. Basically until the underwriter can verify the information the borrower is attempting to state in their application, THEY ARE NOT APPROVED.

Getting from a pre qualification to a pre approval is very quickly and easily achievable. Simply having the borrower stay in touch with their loan officer and providing them with the documentation they are requesting to process the loan application is all it takes. Then they can perform their job of continuing to get the borrower the mortgage you need to buy a home.

So before you start playing taxi driver and showing your clients homes for sale, make sure you have an understanding of whether they have a real approval or just a pre qualification.

Daniel Litvin

President of Advantage Lending Corp

www.AdvantageLendingCorp.com