The Difference Between Pre-Qualification and Pre-Approval, Part Two

The Difference Between Pre-Qualification and Pre-Approval, Part Two

Stone Bridge Mortgage Group_The Difference Between Pre-Qualification and Pre-Approval

 

Portland first time home buyers may often feel in over their heads when starting the home buying process. Stonebridge Mortgage Group is here to help our Portland clients understand the ins and outs of preparing to buy a home.

You may have heard the terms “pre-qualification” and “pre-approval” in regard to mortgages. Although sometimes these terms are used interchangeably, there are differences between the two.

Pre-Qualified

Getting pre-qualified is a simpler, more informal process than getting pre-approved. This process involves supplying a bank or lender with your overall financial picture, including your debt, income, and assets. The lender reviews everything and gives you an estimate of how much you can expect to borrow. Portland home buyers can get pre-qualification over the phone or online, and there’s usually no cost involved. It usually only takes one to three days to get pre-qualified.

Portland home buyers should keep in mind that mortgage loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. It’s based solely on the information you hand over to the lender, so it doesn’t mean much at all if you don’t provide accurate data.

A pre-qualified buyer doesn’t carry the same weight as a pre-approved buyer, who has been more thoroughly investigated. After all, the amount a Portland home buyer pre-qualifies for isn’t a sure thing. It is only the amount for which you might expect to be approved.

Nevertheless, pre-qualifying for a mortgage loan can be useful when it comes time to make an offer. Sellers don’t want to enter into a contract with a Portland buyer who isn’t committed. Sellers will often ask about pre-qualification status. In today’s competitive housing market, having a pre-qualification letter can make all the difference.

For more information on pre-qualifications and pre-approvals read, The Difference Between Pre-Qualification and Pre-Approval, Part One, where Stonebridge Mortgage Group walks Portland first time home buyers through the specifics of what it means to get pre-approved for a mortgage loan.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

Stonebridge Mortgage Group offers experienced loan officer and mortgage broker services in Gresham. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Buying your first home? We can help!

Call us today at 503.661.5580

 

 

 

The Difference Between Pre-Qualification and Pre-Approval, Part One

The Difference Between Pre-Qualification and Pre-Approval, Part Two

Stone Bridge Mortgage Group_The Difference Between Pre-Qualification and Pre-Approval

Stonebridge Mortgage Group aims to help Portland home buyers to understand the intricacies of buying a home. First time Portland home buyers might be understandably confused by all of the different terms and phrases used in various points of the process of buying a home. For example, the terms pre-qualification and pre-approval are often used interchangeably when seeking out information about mortgages. However, they are not the same.

Our last post explains the specifics of a getting pre-qualified for a mortgage. Now, Stonebridge Mortgage Group will explain the details of getting pre-approved for a mortgage.

Mortgage Pre-Approval

Mortgage pre-approval comes after mortgage pre-qualification. The process of getting pre-approved for a mortgage is much more involved. While a pre-qualification acts as a good indication of creditworthiness and the ability to borrow, a pre-approval acts as more definitive proof.

In order to get pre-approved for a mortgage, you must complete an official mortgage application and you must supply the lender with all the necessary documentation to perform an extensive check on your financial background and current credit rating. The lender will then review your finances, and can pre-approve you for a mortgage up to a specified amount. The interest rate you’ll be charged on the loan is based in part on your credit score, so this is when you’ll get a better idea of what that interest rate may be. You might even be able to lock in an interest rate. Some lenders charge an application fee for pre-approval, which can amount to several hundred dollars.

After you are pre-approved for a mortgage, your lender will provide you with a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. This gives Portland home buyers an advantage with the seller because the seller will know they are one step closer to getting an actual mortgage.

How Pre-Qualifications and Pre-Approvals Differ

The following is a brief comparison to show how a pre-qualification and a pre-approval differ:

 

Pre-qualification

Pre-approval

1. Do I need to fill out a mortgage application?

No

Yes

2. Do I have to pay an application fee?

No

Maybe

3. Does it require a credit history check?

No

Yes

4. Is it based on a review of my finances?

No

Yes

5. Does it require an estimate of my down payment?

No

Yes

6. Will the lender give me an estimate for a loan amount?

Yes

No

7. Will the lender give me an estimate for a loan amount?

Yes

No

8. Will the lender give me interest rate information?

No

Yes

For more information on pre-qualifications and pre-approvals read, The Difference Between Pre-Qualification and Pre-Approval, Part Two, where Stonebridge Mortgage Group walks Portland first time home buyers through the specifics of what it means to get pre-qualified for a mortgage loan.

Stonebridge Mortgage Group Offers Guidance On All Mortgage Matters

For professional assistance with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

Call us today at 503.661.5580

 

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