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Pre-Approved vs. Pre-Qualified

Why get pre-approved versus pre-qualified? Pre-qualification is simply when a lender pulls your credit and verbally acknowledges what your employment income is and what your current assets are in checking, savings, retirement account. A lot of people will go off and start looking for homes with a pre-qualification.

Why do you not want to do that? Because you haven’t provided the lender with all of the information that’s required to actually make the loan decision, so we prefer you do is provide us with thirty days of pay stubs, most of, sixty days of bank statements, most recent two years of tax returns and W-2’s. We like to get all that information. That way we can actually pre-approve you, where there’s no unknowns and there’s nothing that’s going to pop-up when you come in.

You find a house with a pre-qualifications and you bring all your documentation in, then all of a sudden, oh wow. Something popped up on your pay stub that you maybe received commission income that you didn’t disclose, or maybe you have un-reimbursed employee expenses that you write off on your tax returns that you didn’t disclose, or maybe you have deposits that went into your bank account that aren’t from your normal payroll that you didn’t disclose, and then, all of a sudden, now you’ve got to jump through all these hoops and document all this stuff, so it’s better to get all this documentation in early, get a pre-approval versus pre-qualification. That way, once you find a home, and you bring us the contract, the process is streamlined. It’s less frustrating. It’s less aggravating, and we can actually close the loan early. That’s why you would want a pre-approval versus a pre-qualification.