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Pre-Qualification VS Pre-Approval – What’s the Difference - YouTube
Channel: Angela O'Hare - Favorite Las Vegas Realtor
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What is the difference between getting
pre-qualified or getting pre-approved
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for a mortgage loan when buying a home?
Well that's what we're talking about
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today and we're starting right now. Hey
everyone welcome back to my channel I'm
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Angela O'Hare a local realtor here in
Las Vegas Nevada with The O'Hare Team at
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Urban Nest Realty. If
this is your first time here, consider
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subscribing by clicking that button
right down below and even that little
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bow for notifications. As you prepare to
finance a new home, chances are you've
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come across a mortgage pre-qualification
or a mortgage pre-approval or possibly
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even both. Some people use those terms
interchangeably, but there are
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differences that every homebuyer should
understand. What does it mean to get
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pre-qualified vs. pre-approved for a
mortgage and what is the difference
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between the two? Well, let's take a look.
So what exactly does pre-qualifying mean?
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Pre-qualification is often seen as the
first step in the mortgage process and
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pre-approval is the next step. With
pre-qualification you'll supply an
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overview of your financial history to
the lender, including income, assets, debts
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and credit score. The lender will review
this information and give you an
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estimate of what you would qualify for.
The key word being estimate. Mortgage
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pre-qualification doesn't always require
documentation of your financial history,
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it could be self-reported.
Pre-qualification can be done over the
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phone or online and there's no cost
involved. It's quick and it usually takes
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one to two days to get a
pre-qualification letter. Keep in mind
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that a loan pre-qualification does not
include an analysis
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of your credit report or an in-depth
look at your ability to actually
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purchase the home. It's based solely on
the information that you hand over to
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the lender. And it really doesn't mean much
if you don't provide accurate data. Your
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pre-qualified amount is not a sure thing
because it's only based on the
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information that you've provided. It's
just an amount that you might expect to
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get approved for. A pre-qualified buyer
does not carry the same weight as a
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pre-approved buyer, who has been more
thoroughly investigated. So what does
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pre-approval mean? Getting pre-approved
is the next step and it's much more
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involved. You must complete an official
mortgage application in order to get
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pre-approved and you'll have to supply
the lender with all the documentation
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that is needed, like pay stubs, bank
statements, w2's, anything about your
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assets,
your salary and any other obligations
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that you may have. To perform an
extensive check on your financial
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background and credit rating. The lender
can pre approve you for mortgage up to a
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specified amount after reviewing your
finances. You also have a better idea of
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the interest rate you'll be charged on
the loan at this point, because it is
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often based in part on your credit score
and you might even be able to lock in an
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interest rate. You'll receive a
conditional letter in writing for the
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exact loan amount, allowing you to look
for a home at or below that price level.
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This obviously puts you in an advantage
when dealing with the seller, because
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they'll note that you're one step closer
to getting a mortgage loan. The other
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advantage of completing a pre-approval
before you even start looking for a home,
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is that you actually know how much you
can afford. You won't waste time guessing
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or looking at properties that are way
beyond your means. Getting pre-approved
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for mortgage also enables you to move
quickly when you find that perfect place.
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And it lets the sellers know that your
offer is serious in a competitive market.
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Here are some key takeaways on on the
different
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between a pre-qualification and a
pre-approval. Pre-qualification is based
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on the data that you provides to the lender,
who will give you a ballpark estimate of
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what you can qualify for.
Your pre-qualified amount is not a sure thing
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because it's based on the information
that you have provided. A pre-approval
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letter is the real deal, a statement from
the lender that you qualify for a
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specific mortgage amount, based on an
underwriters review of your financial
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information. Such as credit report, pay
stubs, bank statements etc. While
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pre-qualification can be helpful in
determining how much a lender is willing
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to give you, pre-approval letter will
make a stronger impression on the
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sellers and let them know that you have
the finances to back up the offer. If
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you're serious about buying a house, then
you need to get pre-approved right away!
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Let me know if you need a referral for a
trusted lender. When the housing market
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is hot homes sell fast, sometimes within
hours of being listed. If you already
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have financing, you too can move fast and
that gives you an immediate advantage
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over other buyers I hope this has helped you learn
what the difference is between a
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mortgage pre-qualification and a
mortgage pre-approval when buying a home.
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Let me know in the comments if you'd
like to get started in the home buying
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process. If you like this video be sure
to hit the thumbs up button, leave a
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comment down below, share with the friend
and consider subscribing to my channel
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if you're interested in learning all
things real estate in the Las Vegas
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Valley. Thank you so much for watching
and I'll see you on the next one!
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