Sr, I'll take it one step further--if you're looking at many REO sales (real estate owned--bank owned properties) in your marketplace, be prepared to make application to the Lender who OWNS the property. Countrywide is doing this and will actually give you preferential fee strcuture. It is NOW becoming a part of the offering process. In our market I'm having all of my buyers who are working a certain price point ripe with REO's to make application to them BEFORE writing on a Countrywide REO. The REO agent has a procedure dictated to them BY the lender. You can wail and moan at the moon at their practices but if you're going to be successful in that arena you'd better go in with all guns blazing and that means writing the offer to THEIR specs!! The rewards can be very great!

Sun May 18 2008, 21:01

Sr,
A pre-approval is welcomed by the buyer, as you will have had a credit check, income verification, etc for approval on a predetermined amount. This assumes you make no major changes (purchases, employment, income) between approval and funding. So they are very different. A pre-qual is done over the phone, typically. If you have been pre-approved, you will see this activity on your credit report immediately, and it may lower you score briefly by a few points, this is temporary. An experienced mortgage broker can do a pre-approval almost as quickly as they can do a pre-qualification, often within 24 hours, and usually there is no charge to do this, they want your business on the loan. Much of the detailed feedback on Trulia you will notice is 'state-specific', and often irrelevent to most of the readers. I've owned homes in four states (AR, CA, OH, TX), and they're all a little different, particularly OH, where I filled out at least 150 pages of documents in a simple closing on a new home..

Sun May 18 2008, 20:54

The only thing that is worth its salt is to do a full pre approval and supply the lender with all of your income and asset documentation.

Sun May 18 2008, 20:18

Pam's description is correct. Check also Mortgage Professor's (he is the best to answer loan questions!) description of the difference between Mortgage Pre-Qualification and Mortgage Pre-Approval at: http://www.mtgprofessor.com/A%20-%20Qualifying/qualification…
No-one is taking pre-qualifications seriously today. You need pre-approval. However, no loan is guaranteed until funding. If you apply for a mortgage and a lender issues loan documents, this loan still might fall through before funding. For example, if lender on the day of funding verifies employment and finds out that information filed "doesn't check", the loan will not be funded. So, the only guarantee is when the loan money is wired to the escrow company.

Fri May 16 2008, 23:03

Sr,

No It's not a garuntee of funding. Basically the bank is going off of what you are telling them. They still have to verify it. You have to understand, the bank is going to lend you thousands of dollars, they want to make sure you are going to be able to pay it back. Either way there is not much difference between a pre-approval and a pre-qualification.....reason being, there are still stipulations with both. The only garuntee of funding is a CLEAR TO CLOSE, secondly besides that is a Loan commitment. Mortgages are more complicated than simple loans, they are not funded in one or two hours, and it is certaintly not like buying a car. The benefit is you eventually getting your financing! Good Luck!

Brent Bester
Mortgage Professional
614-622-8916
bbester@usavingsbank.com

Fri May 16 2008, 22:02

In a preapproval the information you provided is verified/documented, credit is run and submitted to the lender for approval. On a prequalification they just take your word and a letter is written. As a buyer there is strength when you have a preapproval that accompanies your offer.

Fri May 16 2008, 21:09