What’s the difference between a mortgage pre-qualification and a pre-approval?
A pre-qualification is a letter of approval stating you meet basic financial criteria, based most often on the borrower’s word. A pre-approval statement from a lender means the broker has investigated your assets, debt, and credit history to determine whether you can qualify for the loan. Get prequalified online
Why is a mortgage pre-approval so important ?
The real estate market is highly competitive. If you plan to finance a home purchase, a mortgage pre-approval from a lender is critical, especially when multiple buyers are competing for the same property.
A lender pre-approval letter should be included in your offer to the seller.
A pre-approval is more attractive to a seller than a pre-qualification because it means the lender has done more due diligence to determine whether you are financially qualified for the loan.
Northeastern Realty can help with your pre-approval.
You just visited a property and decided you want to make an offer right away, but it is Saturday afternoon, and most lenders are out of the office. The team at Northeastern Realty understands that real estate doesn’t take weekends off. We are available to execute a pre-approval when you need us. Our goal is to ensure you win.
What forms do I need to complete for a pre-approval?
Our loan application.
An authorization agreement granting us permission to obtain your credit history from a credit reporting bureau.
What documents should I be ready to provide for a pre-approval?
Government issued ID for each borrower – this can be a state-issued driver’s license, birth certificate, or passport.
2. Proof of Income
Employees – most recent pay stubs
Self-employed – profit and loss statement
Passive income – most recent financial asset statements
3. Financial Asset Statements – At least two months of your most recent statements, including:
Bank checking and savings
Retirement fund – 401K, pension, self-funded ( ROTH, SEP, Individual), annuities
4. Tax Returns
Employees – W-2 forms and tax returns for the last two years.
Self Employed – Profit and loss statements, 1099, and tax returns for the last two years.
Passive Income – Tax returns for the last two years.