Tag Archives: pre-qualified

Don’t confuse “pre-approved” and “pre-qualified” with a Loan Commitment

15 Jun

For Real Estate Buyers and Sellers:

When you are “pre-qualified,” the lender is making an educated guess about how much you can borrow based on information you’ve provided. When you are “pre-approved,” the lender has verified everything you’ve provided and is offering to lend you up to a given amount at current interest rates — under certain conditions.

It’s much better to be pre-approved when shopping for a home because both you, your real estate agent and the seller know what you can afford. Whether pre-qualified or pre-approved, final clearance and a check at closing — a loan commitment — are subject to an appraisal satisfactory to the lender, good title, a last-minute credit check, and other verifications.

When meeting with lenders, always ask what additional steps will be required to obtain a loan.

And for Buyers…ALWAYS:

Postpone any big-ticket purchases until after you buy your house.

 

Excerpts from “Ten Mortgage Mistakes You Can’t Afford from Realtor.com” By Lew Sichelman

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