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Winston-Salem real estate listings, home buying, and homes for sale in North Carolina

Pre-Qualified or Pre-Approved?

That depends on whom you ask. It seems that definitions can vary from lender to lender and individual to individual. While most discussion, written and verbal, compares pre-qualification to pre-approval, lenders actually offer three levels of services to qualify a borrower for a mortgage-pre-qualification, pre-approval and final commitment ("Pre-Qualified or Pre-Approved: What's the Difference?" posted June 12, 2000, at the Cincinnati Board of REALTORS®, cbor.org)

Pre-Qualification
Usually, in just a 15-minute phone call, a PHML lender can pre-qualify you for a mortgage. Because PHML's underwriters do not validate credit history or employment information for pre-qualification, this preliminary review results in a non-binding opinion regarding how much of a mortgage a borrower can afford. By seeking pre-qualification, you'll come away with an estimated monthly payment and a price range to shop based on the loan size. This information, however, is intended to be a guide as you begin the home buying process. It does not guarantee that you'll be approved for a mortgage.


Pre-Approval
The closest thing to a guaranteed loan comes with pre-approval. After completing a formal application and providing all the necessary documentation related to employment and financial disposition, the file, along with a full credit report, will be thoroughly evaluated and verified by the lender's underwriters. If everything meets to their satisfaction, you will be cleared for a loan of a determined amount. This in no way means you have a firm commitment though. The loan is subject to a fully executed sales contract and an acceptable appraisal.

But being pre-approved can give you a sizeable advantage. Many lenders present borrowers with a letter, which may give you more leverage with a seller.


Firm Commitment
The lender can issue a firm commitment once the seller accepts your offer, the home has received a satisfactory appraisal, and your credit has been rechecked. If all checks out, you've got a mortgage!

To help eliminate unwanted surprises, keep these tips in mind:

  • Don't divulge to a seller how much you've been approved for.
  • Be alert. If your lender hasn't requested documentation, it's a good bet that you've been pre-qualified rather than pre-approved.
  • Contact your lender if your financial circumstances change prior to closing. The pre-qualified or pre-approved status may no longer be valid

John-Mark Mitchell
Yost and Little
336-768-1928 - Office
336-768-1966 - Direct
336-768-1930 - FAX

Email: johnmark@johnmark.com

As a native of Winston-Salem, I love this city and know it like the back of my hand. I enjoy nothing more than to introduce a new resident to all this area has to offer. I am consistently in the top 1% in National Residential Sales and am proud to have received my company's highest honors. Over the last 16 years, I have had the pleasure of helping hundreds of people find the home of their dreams or get top dollar for the home they are selling. It is my personal mission, along with my associates, to provide the best possible service in today's market that will meet and exceed all your expectations in buying and selling real estate. As one of America's top real estate experts in Winston-Salem, I am well equipped to guide you through all your real estate needs. Call or email me today!

http://www.johnmark.com/ is brought to you by John-Mark Mitchell America's expert in real estate for Winston-Salem, North Carolina

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Winston-Salem, North Carolina real estate listings, home buying, and homes for sale -- John-Mark Mitchell of Yost and Little.