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Mortgage: Pre-Approval vs. Pre-Qualification

July 23, 2017

Story Location:
1504 Savannah Road
Lewes, DE 19958
United States

Before the crash, it used to be easy. You called a loan officer, told them what you made and what you owed and BAM! – they sent you a pre-qualification letter. Then came the CRASH and the huge losses when values plunged and people could not afford the homes they purchased. They could not sell for enough $$ to pay off the mortgage companies and their homes ended up in foreclosure or a short sale situation.

Pre-Approval vs. Pre-Qualification, What did the regulators do?

They tightened up the process and even went further. The pendulum swung from easy credit to one that can drive you to distraction. In order to determine what a mortgage company will perhaps lend you, they now require a more thorough review of your financial situation. Today, you need to complete a loan application first. If the initial review looks good, the loan officer will issue you a Pre-Approval letter – and be sure to ask for the “supporting documents.” A Pre-Qualification is no longer sufficient and most mortgage companies will not even issue one.

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