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Getting Pre-Qualified or Pre-Approved

Before you begin to shop for a new home, it is best to get pre-qualified for financing. A meeting with one of our Loan Specialists will help us determine what loan amount we can qualify you for and help you to determine what is affordable for you. Having a pre-qualification letter in hand when you make an offer will put you in a stronger position, adding credibility to your purchase offer.

In order to prepare a pre-qualification letter, we will analyze your credit, employment history, assets, and other relevant information to determine how your profile fits with various lenders underwriting criteria. We will then issue a letter stating that you are qualified for a specific loan amount based on a specific purchase price. As your loan will not have been submitted to a lender at this point, a pre-qualification is simply our analysis of the likelihood that you will be approved for the loan. It is not a loan commitment.

In some cases it is important to obtain a loan pre-approval. Most often we suggest this for a buyer bidding in a very competitive environment or where the borrower is trying to qualify for a loan that barely meets, or falls short lender's general underwriting criteria. A loan pre-approval letter will state that you are approved for a specific loan amount for a specific purchase price. In order to obtain this type of approval we will have submitted your loan file to a lender, or perhaps used an automated underwriting engine (either Fannie Mae or Freedie Mac) to obtain a preliminary approval. Essentially, this is a "credit approval" but it is still not a commitment to lend. A credit approval will still be subject to locking in an interest rate that you qualify for, identification of a specific property, and the lender's receipt and approval of an appraisal, title report, and any other conditions the lender might reasonably request.

In either case (pre-approval or pre-qualification) it is important to have a contingency written into your purchase offer for financing. Our letter will go a long way to satisfy the seller and the seller's agent that you are qualified to purchase. However, for your own protection, most real estate professionals suggest that you maintain a financing contingency until your loan funds.