We all know how stressful purchasing a home can be. It’s important to have a brief knowledge of what you are getting in to before diving deep into the real estate market. Here’s the difference between pre-approval and pre-qualification, and how they affect you as a buyer.
Today’s real estate market is a seller’s market, which means it can be much harder for the buyer to be successful when it comes to their offer. At Indigo Mortgage, we strive to teach borrowers how to position themselves in a way that will make their offer stronger. First, it’s important to understand the difference between pre-approval and pre-qualification. Pre-qualification is just a quick check of qualifying parameters. Pre-approval is a full approval from the underwriter. On a pre-approval, the lender will pull credit, collect income and assets, as well as all other qualifying documentation. The lender will then submit the full loan package to the underwriter, who then gives a full approval. Once the borrower finds a home and puts in an offer, the pre-approval letter carries much more weight with a seller than a pre-qualification. In a sellers’ market, the pre-approval can set the buyers offer apart from the other offers.
Although it may not seem obvious, the difference between pre-approval and pre-qualification is a big one. At Indigo Mortgage New Mexico, we offer pre-approval to our clients free of charge. Feel free to reach out to us with any mortgage loan questions you may have!