Pre-approved vs. Pre-qualified
Hi, this is Mia Schultz, I am your mortgage therapist. And today I want to explain a little bit about the differences between a pre-qualification. A pre-approval, and an underwriting approval. First, we're going to talk about pre-qualification.
Now prequalification can be done over the phone, sitting at the table or quickly on the computer, and basically all this is is taking some rough good estimates of what your income and your debts are and seeing if you kind of fit into those 40 to 50% debt ratios to move forward with going ahead and trying to get a pre approval for a mortgage loan. So let's move on to the pre-approval because that's the good stuff. This is what's going to allow you to go out shopping and work with a real estate agent and put offers on houses.
So a pre-approval we take that income information, your credit information, your asset information, and we collect all the documentation. We fill out a full application, and we review your scenario for the house that you want to buy and look at all the guidelines and match you up and make sure that each one of those assets, incomes, credit, and debt all align with what the guidelines are for the program that we're assigning you to.
During the pre-approval process, it's very detailed and the more detailed, the more assured we're going to be, that once you get to that underwriter, that it's going to be smooth sailing. The last thing that we want it to happen is there be any confusion or uncertainty after you already find the house of your dreams.
You fall in love, you're imagining yourself living there. And for some reason, the underwriter denies your loan. Our pre-approvals are extremely thorough because we would never want that to happen to any of our clients that we send out shopping.
Once you get a pre-approval from us, we're going to give you a letter and worksheet that we will review with you to go over all of the numbers so that you know all the different aspects of what's going to happen as we go down the line and get you into that new home. Once you contract on a home, we're going to have generally about 30 days to close your loan from start to finish.
And that entails getting your disclosures sent out your appraisals, ordered your title, ordered all the things about the house. Your contract is delivered over to us so that we can see the details of the negotiation you had with the seller. And we're going to package this all up into a nice little bowed up package and send this off to our underwriter to review. When the underwriter reviews everything, she's going to give us what's called a conditional approval.
And let us know if there's a few questions that she may have on some of the documentation that we may have submitted, or she just needs a little extra documentation to meet the guideline. So it's generally a two-step underwrite in your approval process, but once we have that conditional approval, it's usually smooth sailing from there.
We collect those documents, give them back to the underwriter, and we look for the clear to close. Which means there's nothing left that we need from you or the sellers or the agents, and we can move you down the line and get you scheduled for that closing to give you the keys to your home. And that's it. Call me if you have any questions about getting pre-approved, pre-qualified, or ready for underwriting after you're under contract. I look forward to working with you.
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