A quick explanation of the difference between being pre-qualified and pre-approved for a home mortgage from our guest Patty Solie, with hosts and Realtors Tracy and Kathy Nelson of Eye4Homes TV.
Patty explains: "Pre-qualification means that I have had a conversation with you as a new buyer over the phone and you’ve shared with me what your income is, how long you’ve been on your job, and what your debts are which are monthly debts, and those would be debts that are contractual such as minimum monthly payments on credit cards, car loan, perhaps you already own another property. And so we find out what is your financial picture, and I then run calculations. We learn what you have available as a down payment, and we run the calculations and I can give you a pretty close estimate of what the new payment would be that you could qualify for. That’s a pre-qualification that’s been completely verbal. Now the next step is pre-approval. In a pre-approval process you have actually taken the step to complete an application and we have run a credit report for you. So we know what the credit scores are. We know what the actual minimum payments are exactly because they are appearing on the credit report. You might have forgotten one, or you might have told me that the minimum payment is more because you make higher monthly payments. So with your credit report I know what the actual payments are. And then you have also provided me with your income documentation. So that would be pay stubs, tax returns for the past two years, W2’s, 1099’s if you if you’re self-employed, and you might be a corporation, you might be a sole proprietor which would mean personal tax returns, or you might be incorporated which would mean corporate as well as personal tax returns. So pre-approval means I’ve had a chance to review all of that and input the information into what we call the Automated Underwriting System. And I’ve run a decision that says Approve Eligible."
See the complete show with full transcription at: http://eye4homes.tv/buying-your-dream-home-today-show-1/
Patty Solis: http://pattysolie.com
Priority Home Lending
Tracy and Kathy Nelson, Realtors
John L Scott Redmond
16564 Cleveland St. Suite H, Redmond, WA 98052
Call or Text (206) 299-2301
Learn more about a Mortgage Loan: http://en.wikipedia.org/wiki/Mortgage_loan