Pre-Approval and Pre-Qualification – what are they?

 

Mortgage Pre-Qualification

A pre-qualification is essentially estimation by a mortgage broker on how much a borrower can borrow based on income, debt and down payment figures given by a borrower.

Mortgage Pre-Approval

This is a formal pre-approval by a Lender of an amount that you can borrow based on supporting documentation provided by a borrower. Documentation usually required includes  2 years of paystubs & W2s, individual tax returns, 3 months of bank statements, if self-employed then 2 years of business tax returns, if divorced then a divorce decree, and other supporting documentation as needed per borrower situation.

As it is a pre-approval with no obligation, broker will usually ask for payment for the credit report which will be required.


For more information, contact out knowledgeable brokers at Loan People USA.

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