Jackson Erwin Realty

Jackson Erwin Realty, Inc. -Charlotte, NC. Real Estate for Sale. Charlotte, North Carolina Homes for Buyers and Sellers.

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PreQualification vs. PreApproval

 

One of the greatest misconceptions people have regarding the home buying process is the difference between a PreQualification and a PreApproval. Many people use the two terms interchangeably, however the meaning of the words are completely different and produce completely different results.

In the real estate industry, a PreQualification is the process in which a mortgage lender asks the prospective homebuyer basic qualifying questions to see if he or she meets minimum guidelines to qualify for a mortgage loan. If you are prequalified based upon your answers, the loan officer may issue a PreQualification letter. This letter merely indicates you may be able to qualify for a mortgage. However, at this point, your answers have not been verified. These questions are centered upon:

  • Knowledge of Possible Credit Score
  • Length on Current Job/Industry
  • Current Salary or Hourly Wage
  • Current Address
  • Previous Homeownership
  • Previous Bankruptcies or Foreclosures

 

On the other hand, the PreApproval is a more thorough process which involves verification of the requirements needed for a mortgage loan. In order to obtain a PreApproval, the loan officer will closely verify each requirement—as it is essential for you to satisfy all of the requirements in order to obtain a PreApproval letter. The processes include:

  • A Thorough Check of Your Credit Scores from all 3 Major Credit Bureaus
  • Two Months Worth of Pay-stubs or Two Years of Your Tax Returns/W’2s to Verify Income for the Self Employed
  • Two Months Bank Statements
  • Comparison of your Debt-to-Income Ratios

Without a doubt, the PreApproval is the most accurate and thus, first step in order to begin the home buying process. Simply put: A person can’t buy a home without cash or the current ability to obtain a mortgage loan. That’s why here at Jackson Erwin Realty, we work diligently with our clients to ensure they complete the first critical step towards homeownership: obtain a PreApproval from a reputable mortgage lender. It is the first step all prospective homebuyers should take towards homeownership. If you are looking to purchase a home or you want more information on how you can become a homeowner here in Charlotte, North Carolina: contact Jaclyn today!

 

 

 

 

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Uptown Charlotte Location: 101 S. Tryon Street (Suite 2700) Charlotte, NC. 28280.

Office: (980) 939-6057