PRE QUALIFICATION PRE APPROVAL...What's the DIFFERENCE?

Pre-Qualification is a great beginning to your new home search. It is an informal discussion between borrower and lender. The lender estimates the amount that you can borrow based solely on what you tell them about your income and assets. The lender does NO verication and is not bound to make the loan when you're ready to buy.

Pre-Approval gives you the most power in your real estate transaction. Going through the pre-approval process is a sign of your seriousness to the sellers. It places sort of a Good Borrowing Seal of Approval on you. Pre-approval means that you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can really qualify for a given loan amount with one or more specific mortgage programs.

Based on this information, the lender will provide a pre-approval letter, which shows your borrowing power. Although not a final loan commitment, it demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to sellers since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

Don't know which lender to choose? Ask your REALTOR® they may have a list of preferred lenders. Or you can start with whoever you bank with. If you are looking for an agent in the WILLIAMSBURG area, I'd be happy to help!

Courtesy of Yvette Smith SRES® REALTOR®
WILLIAMSBURG REAL ESTATE
757-753-7472
5350 Discovery Park Blvd
Williamsburg Virginia 23188
YvetteSmith@lizmoore.com