4/27/2021
What's the Difference Between Preapproval and Prequalification? | Peter Palivos Attorney | Las Vegas | Real Estate Development
a What’s the Di erence Between Preapproval and Prequali cation? by Peter Palivos | Apr 15, 2021 | Las Vegas, Peter Palivos, Peter Palivos Attorney, Real Estate
Before a home buyer makes an appointment to preview a home, they should get their nancial house in order. A mortgage lender streamlines the process, and they can provide valuable tips on what to do about credit, debt, or income issues. A home lender can create a preapproval or a prequali cation letter. Once a buyer has this document, they are ready to start shopping, but there is a signi cant di erence between the two papers. Prequali cation Someone who presents a prequali cation has started the initial process of applying for a home loan. This means they talked with a lender and provided general information about their household income and debt. https://peterpalivos.com/whats-the-difference-between-preapproval-and-prequalification/
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4/27/2021
What's the Difference Between Preapproval and Prequalification? | Peter Palivos Attorney | Las Vegas | Real Estate Development
The loan o cer takes those details and constructs some possible loan options. The data will not be veri ed. All of the information is procured in good faith. The advantages of these letters are they are quick to get, often over a phone call, and it starts the ball rolling in the home buying process. The disadvantages are the terms of the loan could change if the real numbers are signi cantly di erent. If it is a seller’s market and buyers are competing for every home, a prequali cation letter is not as strong as a preapproval. Preapproval This process is more intense. It requires a bit of legwork and time, but there are more bene ts. If someone opts for this route rst, they will need to supply the lender with paycheck stubs, bank statements, and tax returns. Also, they must agree to let the o cer pull their credit and pay for any fees involved. The process is not instantaneous, like the prequali cation application. Once approved, the document is only valid for a month or two. This timeframe is established so that the lender can monitor any income or debt uctuations and adjust the loan amount if necessary. The advantages of having a preapproval letter are the buyers know their exact purchasing power, and the o er is stronger. The seller will see the full approval, and they will know they have a prepared and serious buyer. Buyers should not make any changes to their nancial standing while house hunting. Once in escrow, the loan o cer will verify the previous information to ensure it is still all in good standing.
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What's the Difference Between Preapproval and Prequalification? | Peter Palivos Attorney | Las Vegas | Real Estate Development
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What's the Difference Between Preapproval and Prequalification? | Peter Palivos Attorney | Las Vegas | Real Estate Development
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