Pre-qualify vs. Pre-Approval
What is the difference?
So you’ve been pre-approved for a home loan from the loan officer you’ve been working with and now you're ready to buy that new home. You open escrow, put down a deposit and 30-days later you loose that house because the home loan never closed. Furthermore you’re out your deposit…what happened?
The problem is you were never pre-approved, you were pre-qualified from your loan officer. A pre-approval ONLY comes from the bank and not the loan officer. In recent years, loan officers have used the terms as if they were to mean the same thing. And when a loan officer issues a pre-approval, with out the bank approving the loan, he/she puts the client at risk.
What should happen is when you apply for a loan with a mortgage company, the loan officer should issue a pre-qualification letter if he/she believes you can get approved with the lender. When and if an underwriter issues an approval, that is when a pre-approval letter should be issued and not before then.
Kevin O’Connor
Mortgage Consultant
www.koloans.com
800.550.5538
Impounds The Appraisal Reverse Mortgage
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