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What Is A Mortgage Pre-Qualification?

March 4, 2014 by support Leave a Comment

What Is A Mortgage Pre-Qualification?A mortgage pre-qualification is an initial estimate of what type of mortgage a borrower could get. It is limited, though, because it’s only based on what the borrower tells the lender, which might not be the same as what the lender finds out when it goes through a full process of analyzing the borrower and his credit.

Steps Of A Pre-Qualification

To get pre-qualified, a borrower starts by finding a lender. Typically, he will give the lender basic information on his ability to borrow. This includes his income, how much money he has in the bank, his current payments and an estimate of his credit worthiness.

The lender takes the pre-qualification information that he gets and compares it to the loan programs of which he is aware. For instance, if he knows that a borrower doesn’t have a lot to put down, but the borrower mentions that he’s active-duty military, the mortgage broker might offer a VA loan as an option.

Based on the programs he sees and the information the broker gets from the borrower, he will tell the borrower what kind of mortgage to expect. Typically, this gives the borrower a sense of the likely rate and of the amount he can borrow. Generally, this is enough to let a borrower start looking at listings with a realistic sense of what will be affordable.

Mortgage Pre-Qualifications And Pre-approvals

When it comes time to start writing offers, though, a mortgage pre-qualification might not be enough. A pre-qualification is missing one important factor — underwriting the borrower’s income and credit. When a borrower goes beyond a pre-qualification to get a mortgage pre-approval, he submits his credit for the lender to check.

That way, his qualifications get confirmed and the lender can issue a more binding letter that not only lets him know what he can afford but also lets him show a seller that he is truly qualified to get a loan. With that letter, his offer may be viewed as stronger and he can be more likely to get the ability to buy the house he wants.

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Filed Under: Home Mortgage Tips Tagged With: Home Mortgage Tips,Pre-Quailification,Lender

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This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker #01821025; NMLS #135622. Loan approval is not guaranteed and is subject to lender review of information.

Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender.

http://www.c2financialcorp.com
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The services referred to herein are not available to persons located outside the state of California.
C2 Financial Corporation is approved to originate VA and FHA loans, and has the ability to broker such loans to VA and FHA approved lenders. C2 Financial Corporation is not acting on behalf of or at the direction of HUD/FHA or the VA.

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