What’s the difference between a preapproval and a prequalification? You were told you were approved for a home -does it matter?
A prequalification is basically a conversation between you and a loan officer. You give them your income and debt, they give you an idea of what you can qualify for. Your loan has not been underwritten, your credit has not been checked and you have not given the loan officer any income documentation. It really doesn’t mean anything, just gives you an idea of what you might be able to buy.
A preapproval means you have given your loan officer income documentation (paystubs and w2’s), they pulled your credit and they have run your file through an underwriting system. This is much stronger and allows you to know that you have an underwriting approval. Realtors are looking for a preapproval when they write an offer for you – they (especially the seller) want to know that you are approved and ready to go. The one piece missing is the appraisal and that will not get done until you have found a home.
Another approval that we do is a AMEC Express approval – this means I sent your loan application along with income documents into underwriting. An underwriter will review everything and send me an approval. This approval goes along with our Closing Guarantee – if you don’t close on time, you and the seller may each get $5000. There are conditions that must be met but this can help you get a home. With the current market, anything you can do to make your offer look stronger can help and this program may help you get a home over your competitors!
The Express approval is valid on conventional, FHA and VA mortgages. We can’t do it on bond loans (MN Housing and Dakota County CDA programs).
If you are interested in this approval – or just getting a mortgage approval, give me a call and let’s see what we can do!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
