Pre Approved Definition | Pre Qualified Definition (Pre Approved vs Pre Qualified) - YouTube

You're probably thinking about buying a house right now and you've heard the

phrase is pre-approval pre-qualified being thrown around and you don't know

the difference between the two well in this video we're gonna be covering that here today

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Hey what's up I'm Andrew Castelo with Keller Williams Realty here in

Sacramento California and today we're going to be talking about the difference

of a pre-approval and being pre-approved and pre-qualified and have a special

guest here with me again today and we have Mr Antonio Lopez why don't you

introduce yourself Antonio. Thank you Andrew again my name is Antonio Lopez

I'm with movement mortgage born and raised here in Sacramento and have been

doing loans for over 12 years well Antonio let's go ahead and jump right in.

What is a pre-approval alright it's a great question so pretty approval,

that's really what you want in order to start shopping your when you're looking

to buy a house. Pre-approval means that you've provided all the financial

documents that we as lenders request of you so primarily that's gonna be your

w-2s and tax returns if you're an employee.

Just your tax returns if you're self-employed we'll also look at your

last 30 days of your pay stubs last 60 days of your assets bank statements

retirement accounts things like that and then of course your IDs and so forth. But

with that information we get you fully pre-approved and when you're

pre-approved we know exactly what you've been qualify for we know the loan

program that's gonna suit you and your family best. You know exactly what

the dollar amount is per month to be paying and the closing costs. What is

pre-qualified? Pre-qualified so that's gonna be a little different than

pre-approval. Pre-qualified is just a real generic conversation that's when we

address the three ingredients in getting anyone qualified for a loan that's going

to be their cash their credit in their income but it's just a very basic rough

conversations. It's like hey, I've got ten thousand dollars to put down my credit

scores are good they're around seven hundred and I made sixty thousand

dollars a year so with that I can guess to me based on what they're telling me

you know maybe they can go to 285k or 300k. Really basic so pretty qualification

doesn't really mean anything and it's not what's required when you're actually

out shopping for a home and you actually want to submit an offer for a property. In

this situation if that's all that you have a pre-qualification a

pre-qualification and you're taking that to go put an offer on a home it's not

necessarily the most accurate for that buyer situation. That's correct, you owe

it to yourself look this is the biggest financial decision of your

right you should you should know exactly what you're going into because

oftentimes it's going to cost you more than you initially think with

inspections repairs and not to mention moving costs and so forth.

Pre-approval is what you want we want to know exactly what you can do. What a

little program you're gonna go in and that you can actually deliver on the

financing when you find that home. Pre-qualification is easy if you want to

just get the process started to get an idea of the range of home. I'm

gonna look between 350k and 500k or 400k okay you know 600k that way you can have

an idea okay am I even in that range but pre-approval you're really gonna nail it

down and you're gonna be basing that off of current interest rate. Pre-approval is

more of an accurate assessment of what the financial situation is for that

particularly buyer. So that's what you want to have before going in putting any offers

in because not much is really gonna change with that. That's exactly right.

Well Antonio why don't you give us an example or some situations

that have happened for clients of yours when they got the pre-approval done

and why is that really important. One of the real benefits of working

with Movement Mortgage is we can have our underwriters review the files upfront so

not only do you get a approval from me after reviewing your financial documents

but we can actually send it into underwriting. The benefit there is

that you know exactly the dollar amount that you can be pre-approved for. I've

had circumstances where clients have gotten pre-approved or pre-qualified

with other lenders and when they come to me their numbers are different. Either

we're able to use a little bit more income than the other plate the other

place was or sometimes they're trying to use income that we're not gonna be able

to use and so they may be shopping in the wrong price point and the last time

oh you want us have them money you know coming out of pocket on a home that they

can buy or they can't afford so getting pre-approved it's just well worth it

it's just it's just worth your time and it only takes another day or so to make

sure that you can actually deliver on that home and

it's okay to fall in love with it. I've had situations before

with a client got a pre-approval or pre-qualified and you know

the person at the bank or is typically banks where this happens they say yeah

you're good for this amount we get in a contract into the escrow on a house that

they really like and the next thing you know a couple weeks into it they don't

qualify because there's a problem there's a problem that comes up because

they didn't run all their information through their system to make sure that

it would actually work. Next thing you know your deposit is that risk you're at

risk of losing that house and it's just a big mess so you want to make sure your

hopes are up yeah absolutely fun and so you want to get this done ahead of time

so that way when you do fall in love with something you know hey we can make

this happen and close on it right that way at that point all you're doing is

qualifying the house make sure the house appraises make sure the home is it is

sound and you know the inspections go go smoothly but right there you know that

you're a strong buyer. Well let's talk about then when you have one of these

letters right here and with your company what would that do for that buyer?

How would that make that buyer look in a aggressive market? Well right

now we're definitely in a competitive market we're in the summer of 2019 there

are not as many homes available in the market so when one hits there's a lot of

people who want to jump on it right away. One of the benefits that we have over at

Movement Mortgages we have something called an MBA that's the movement buyer

advantage and the advantage of that buyer gets is that we're gonna

underwrite that file in advance. So before you actually start shopping in

submitting offers I'm gonna have reviewing your w-2s bank statements pay

stubs and tax returns we will get that in front of one of our underwriters and

within 24 hours they will issue a pre-approval letter. That is a really

strong pre-approval letter because the way it's written it tells the listing

agent that this files already been underwritten by a human underwriter not

just a desktop underwriter of computer underwriter. So that's the value and with

that we can often close in 15 days or less because all we need to do is the

appraisal at that point the buyer has already been per approved.

It's almost like a cash offer yeah if you will which if you know anything

about markets where there's a lot of cash offers sellers tend to lean to

those ones because of that they're not contingent a lot of times

when they're purchasing the home. Faster

closing because faster closing which that might not be important that might

be important but is that least nice to know hey we can close in less than 30

days so if you are up against other offers that have the same same purchase

price as you but you can close a lot faster well and you're ready under in

then it makes your offer look a lot yeah so that's such a competitive advantage

and where our value lies is not only consulting you on you know the ins and

outs of buying a home but getting your offer accepted. We've been in business a

long time. We're local we know the agents and with that comes a reputation so when

we deliver an offer and we we know we can stand behind it that's really

important and when they know that the buyers been fully underwritten they can

deliver that news and information to their seller with confidence that this

is a deal that will close. That's a win-win for everybody.

Let's give a little tip here for sellers because I know a lot of times sellers

are looking at multiple offers that get pre-qual and things like that what are

some things that they can ask their agent about that particular buyer for

them to make sure hey this is a solid but solid person either yeah but they're

dealing with. I always make it a practice as the lender

to call the listing agent to introduce myself. So that's one of the things that

the sellers can really look into is they can qualify that lender not only that

buyer and that offer but that buyer's agent. So when you present an offer it

should be a tight clean offer where you know Andrew's made the phone call to

the listing agent in advance I then call the listing agent they can let the

sellers know that this is a buyer who's serious and can close quickly and that's

that's the advantage of what we a team. Communication is really key and

it's better to over communicate especially with the other side because I

know in our business there's a lot of people who don't communicate and they

all of a sudden that can't be found once their offers accepted but there's so

much working parts that are involved with being able to close on a home. That

is really important to have all lines of communication open because in the end we

want to get the household we want our clients to be happy and the way to do

that is to communicate through the entire process.

Well Antonio, thank you so much for your time I really appreciate

this we've again discussed what the

difference is between a pre-qualification a pre-approval through

some awesome tips right over there to help buyers and sellers. If you guys want

to ask any questions to myself or Antonio I'm gonna leave Antonio's

contact information in the description below and if you found this video to be

helpful please make sure you hit the like button and consider subscribing.

I do weekly real estate videos with tips and tricks that can help you throughout

your buying and selling process. Also information about Sacramento here

locally so thanks again and I hope to see you guys soon!