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My fiance has been going through the process of getting a house for the past month. We have been through two fazes out of three for getting qualified for a home loan. So far, we have had no problems and have been able to porvide all the paper work needed to get things in line… For some reason though I am very nervous about the final qualification. The big wig of the state has to approve us, we have been pre-qualified through two other fazes prior to this one with no issues…I dont know why i have this bad feeling. What exactly does being “pre-qualified” mean….

4 Thoughts on what does it mean to be “Pre-qualified” for a home loan?
  1. Reply
    Ryan M
    February 10, 2014 at 12:20 pm

    It means you passed their sniff test but DOES NOT in any way indicate that you are actually approved. Getting pre-approved is a MUCH easier process than actually approved.

  2. Reply
    Rob Peters
    February 10, 2014 at 1:03 pm

    It’s an advertising come on. Everyone alive is pre-qualified. It don’t mean a thing. Fill out an application to find out if you can get approved.

  3. Reply
    Bostonian In MO
    February 10, 2014 at 1:46 pm

    Pre-qualified means that they have reviewed your application and that it looks good on the surface. They have not yet pulled your credit record or scored the application against their loan approval criteria.

    Pre-approval means that they have pulled your credit record and scored your application against their credit granting criteria. Subject to submission of a satisfactory contract and the inspection and appraisal of the home, your loan application will be approved as long as you have sufficient down payment and the loan is at or less than the maximum amount that you are approved for.

    Being pre-qualified really does not mean much; it’s little more than window dressing. Most agents will require you to be at least pre-qualified before they invest much time showing you properties. Within a week or two, many will want you to show a pre-approval letter to continue working with you.

    Many sellers will not entertain offers unless you have been pre-approved for a mortgage loan. I am selling a home right now and refused offers from two potential buyers who didn’t even have a pre-qualification letter, let alone a pre-approval letter. I have a qualified offer that’s in escrow now and we should close within the week. Neither of the two who made earlier offers have been pre-qualified or pre-approved as of yet according to my agent. Had I considered their offers, I’d have been wasting my time.

  4. Reply
    Monte P
    February 10, 2014 at 2:35 pm

    Prequalifying for a mortgage means that the bank has pulled your credit score, and verified your income; and those two items look solid enough for you to get a mortgage.

    Once you select a home, the bank will require much more investigation to be done. They will look at how much debt you actually owe, what the house is worth, what similar houses are selling for, what the condition of the house is, they will actually investigate your credit report, and they will make you explain any issues, and possibly make you repay any outstanding bad debts.

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