Prequalify mortgage

With a mortgage pre-qualification, the borrower typically has not stated their social security number, so it is not possible to check credit.

A borrower can prequalify for a mortgage by supplying unverified information. This information is used to determine if the borrower fits the loan program guidelines. If the borrower fits the guidelines a more formal process that verifies the borrowers information is known as a preapproval.

Real estate agents typically prequalify their clients for a mortgage before showing them property. Prospective buyers that have been prequalified for a mortgage have a general idea of a loan amount and program for which they qualify. Before making an offer on a property, prospective buyers should consult with a competent mortgage professional to get pre-approved.

Pre-qualified is not the same as pre-approved for a mortgage. Pre-qualified generally means that some simple calculations have been made to determine what price range a buyer can afford. A Pre-approval is a more detailed process that includes credit checks and some other verifications and an automated underwriting approval

A written pre-approval, rather than a pre-qualification will greatly improve your negotiating position when making an offer on a home. The seller knows that your financing has been arranged.

To be prequalified for a mortgage is not really that important anymore and does not mean too much. Realtors and sellers will just about always require a pre-approval, not a prequalification, from a potential buyer before they are even permitted to make a bid on a home. As you can see throughout the page, there is a difference between a pre-approval and prequalification. While a pre-qualification will give you a basic idea as to how much of a home you can afford it will not be taken nearly as seriously as an actual pre-approval letter.

» DISCLAIMER: The information contained in this article on 'Prequalify mortgage' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.