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"What is Pre-qualifying?" Pre-qualifying is a process whereby a loan officer obtains information about you, either over the telephone or face-to-face and indicates the loan amount you can qualify for and the best type of loan to meet your particular needs. The loan officer will want to know information about your income and a list of your debts. The lender through a series of calculations will be able to determine the size of a loan you qualify for based upon loans available in today’s market. This is referred to as your income to debt ratio. The term pre-qualified simply means that a mortgage or real estate representative has examined your income to debt ratios...this does not mean pre-approved. The lender would then give you a "pre-qualifying letter" which is of considerable value in dealing with a Realtor or a potential seller. Realtors and sellers are interested in dealing with people whom they know to be able to get the loan necessary to close the deal. Sometimes sellers are anxious and will take somewhat less in price from someone who can close quickly. If you are about to begin the process of buying a home we would strongly recommend pre-approval over simply being pre-qualified.
The loan professional that has made this information available to you specializes in assisting those individuals with obtaining a home loan whether for purchase or refinance. Your loan professional in most cases can advice you on the best approach and help you with your specific loan requirements.
