Mortgage related Frequently Asked Questions:
Q: Should I get Pre-Approved for a Mortgage before I start shopping?
A: Yes, you should definitely get pre-approved before you start shopping. Reason why: Pre-approval is a preliminary screening of ones creditworthiness, debt commitments and income. The mortgage lender will use this information to arrive at an estimate of how much mortgage you can afford. The whole process should take an hour or two at most, and it is free.
Q: What is the difference between a Pre-Approval Letter and a Pre-Qualification Letter?
A: Pre-Qualifications are unverified letters of approval. Meaning the information you have provided the mortgage professional has not been verified by pay stubs, tax returns, and possibly credit reporting. Pre-Approval on the other hand, is when all of the provided information has been verified with actual pay stubs, bank statements, tax returns and the such. Many times the mortgage professional has submitted your information to a manager level person in their company for review and validation. A mortgage Pre-Approval is a much stronger document to provide a seller when making an offer. The seller can look at a Pre-Approval and be more confident in the buyers ability to obtain financing.