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What is the difference between a pre-qualification letter and a pre-approval letter?  The pre-approval letter demonstrates you are a ready, willing, and able buyer, and you are serious about purchasing a home.  Not only have you talked to a lender but you have submitted tax returns, bank statements, pay stubs, employment history, and other documentation that is required for the loan process.  The bank has submitted these documents to underwriting and based on your actual paperwork, you qualify for a loan, subject to the property you select.  A pre-qualification letter will get your foot in the door but in a competitive seller’s market, the pre-approval letter will hold more weight.  The pre-qualification letter means that you have called a lender and they have maybe pulled your credit score and “ran the numbers” based on the information that you verbally provided.   After you have placed a home under contract then you need to prove everything you told the lender by providing all of your financial documents.  Of course, neither is a guarantee you will be able to obtain a loan but the pre-approval letter will go much further with any seller.

Master Brokers | May, 2019 | 828-850-0142