Have you ever had a realtor ask you if are pre-qualified or pre-approved? They sound like they are the same thing, right?
Actually, they’re two different things. But they’re kind of the same. Clear as mud, right?
Let’s figure this out.
The first thing I want to help you with is to know the names of all of the players. First one: a loan officer, and second: an underwriter.
The Loan Officer!
You’ll have done your 2, 2, 2 — which we cover in another post. He has checked your income, your bank statements and your taxes carefully.
Then the loan officer helps you get pre-qualified, which means you can start looking at houses — get your foot in the door, so to speak — because now you know what you can afford.
You’re approved for a certain amount of money to purchase a home and a payment that doesn’t drown you 6 months after moving in. The loan officer sends your pre-approval off to the ….
This is the second character in our little story. The underwriter gets you pre-approved. Still confused?
The loan officer helps you get your foot in the door and the underwriter says that the door gets to be yours! The underwriter is much more detailed in what he needs and all of his calculations and numbers that were given to him from the loan officer.
The loan officer and the underwriter are working on your behalf. They’re not enemies. They are a team with you. Everyone is working to get you pre-approved as soon as possible.
Once you’re pre-approved, your loan contingency is almost non-existent. Those first 21 days of your loan, are already handled. Your loan is ready to be funded straightaway. You don’t have to hold up escrow waiting for the loan approval.
You’re pretty close to a cash offer at that point!
Good news for a seller!
If you’re a seller, and a pre-approved buyer comes to buy your house, that offer should rise to the top of the pack of offers, because it’s so close to cash. All you need after that is an appraisal that comes in at value, and the inspections and repairs to be done. Very often, you can close quicker with a buyer that is pre-approved!!
I hope this made a very complicated situation a little bit clearer. Hopefully, whether you’re buying or selling, this part of the process is a little bit easier to understand.
Weekly Welcome Mat, Bakersfield Homes & Lifestyle
“Welcoming you to Bakersfield life, as well as, your next home.
Angel Przybylski, Realtor
Bakersfield Real Estate Group, AgentCor Realty
5601 Truxtun Avenue, Suite 150
Bakersfield, CA 93309
P.S. If you’re a First Time Homebuyer and need to figure out what it looks like to get pre-qualifed or pre-approved, click HERE to get your process started!