What does pre-approved mean?
The pre-approval process starts with an evaluation of a borrower by a lender to better determine whether the borrower should be given a mortgage loan. Careful consideration of the borrower and their financial situation helps the lender make an informed decision about issuing a pre-approved loan. Should the borrower meet the lender’s requirements, the lender will issue the borrower a pre-approval letter.
Is pre-approved the same as pre-qualified?
Although the terms pre-qualified and pre-approved are oftentimes used interchangeably, they are not the same. A pre-qualification should be viewed as an estimate and a general guideline while shopping for homes. A pre-approval is not general. It states that the borrower could get a loan for the approved amount. A borrower can be pre-qualified and not receive pre-approval. A pre-approval is necessary to purchase a home, whereas you cannot purchase a home with only a pre-qualification.
How do I get pre-approved?
Getting pre-approved starts with an application. Mortgage lenders require specific information from the borrower to get pre-approved. Be prepared to provide the following:
● Employment verification
● Pay stubs
● Proof of assets
● Tax returns
● Bank and mortgage statements