Understanding a Pre-Qualification vs Pre-Approval
Posted On: July 15, 2021 in: Home Loans
by Park Bank
WHAT YOU NEED TO KNOW
Knowing the difference between being pre-qualified and pre-approved can help you better understand how to become a better and more efficient buyer, ultimately putting you in the best position to make the winning offer when you find your dream home.
WHAT DOES PRE-QUALIFICATION MEAN?
Pre-qualification is the initial step in the mortgage process, and it’s generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. However, loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home. In other words, a prequalification is not a sure thing and it doesn’t carry the same weight as a pre-approved buyer.
WHAT DOES PRE-APPROVAL MEAN?
A pre-approval is a request for a loan to buy or build a home that is a comprehensive, underwritten review of the creditworthiness (income, assets, debts and credit) of your application. Based on this information, Park Bank issues a written commitment to you that is valid for a designated period of time. Obviously, this puts you at an advantage when dealing with a potential seller, as he or she will know you’re one step closer to obtaining an actual mortgage. Also, getting pre-approved for a mortgage enables you to move quickly when you find the perfect home.*
GETTING PRE-APPROVED AT PARK BANK
Park Bank mortgage advisors are experts in helping you get pre-approved for your mortgage loan. They will quickly and efficiently review the information you provide to help give you the buying power needed to land your dream home. Plus, as a community bank, Park Bank is committed to making local decisions as opposed to other banks that may not do their underwriting locally. Reach out to our mortgage team for more information on the pre-approval process or if you’re ready to apply for a mortgage loan.
*Subject to credit approval