Ask a Realtor®: Is Being “Pre-qualified” for a Mortgage Loan the Same Thing as Being “Pre-approved”?

A: Although these two terms are often used interchangeably, they do mean different things. Being pre-qualified means you’ve met the standards for qualification based on information provided on your application. Being pre-approved means you’ve met the standards for qualification based on proof.

The idea of applying for a mortgage loan can be daunting, but it’s not as difficult as you might think. Getting pre-qualified can take as little as an hour if you have some basic information! These are the questions you should be prepared to answer on the application:

• What is your annual income? (you can include income from overtime, child support, SSI, etc.)
• How long have you worked at your current job, or in your current field of work?
• What debt do you have? (i.e. car loan, credit card payments, student loans, personal loans)
• What do you currently pay for housing? (rent/mortgage)
• How long have you lived at your current address?

A mortgage lender will do a “soft pull” of your credit and use this information to determine of you are qualified for a mortgage.

The next step is to get approved for the mortgage. This is the part where you’ll have to prove the statements you made on your loan application. This can be done while you’re looking for a house. It will require a little more work on your part, but it’s worth the effort if home ownership is your goal. You’ll be asked to provide things like:

• A month’s worth of pay stubs
• Last two years worth of tax returns and W-2s
• Names and addresses of your employers over the last two years
• Last three months of bank statements
• A copy of your current lease or your current mortgage statement
• Names and addresses of your landlords over the last 2 years

Although you can start shopping for houses once you’re pre-qualified, being pre-approved gives you a whole new level of confidence. You’ll be able to make a strong offer on a house you love. A great Realtor® can guide you through the process from start to finish. You know the one! Call me today to learn how my team of fantastic lenders and I can get you pre-qualified, pre-approved and into your next home!

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