Palm Beach Real Estate and Loans

Today's topic is: Pre-qualification vs Pre-approval and how they affect your search for Real Estate in Palm Beach.

Before getting into what's what, the basic idea is that BEFORE you start looking around for your new Home, you need to know how much you can borrow. (If you're paying cash, just skip ahead to the next article!)

That makes a lot of sense - but you would be surprised at how many Clients want to look at Property before checking into a mortgage.

I've had many people come to me over the years trying to get a Loan to buy property that they couldn't possibly get approved for.  I felt badly for them - they found they Home they'd been dreaming about and then got a big disappointment.

In addition to that, most Realtors® won't even take a Buyer out to look at property if they haven't been pre-approved!  Your initial reaction might be that they're being a little pushy, but it makes no sense to show people things that they won't be able to get.  On the Seller's side of the fence, the majority of the time an offer to buy won't even be considered if the Client isn't pre-approved.

Now you can see WHY you want to check on the financing first - but what do you want a pre-qual or a pre-approval?

Don't be fooled.  If someone tells you that they are the same thing, they are either un-informed or, quite frankly, lying.

Here's a pre- qual:

• How's your credit? Good!
• What's your income? Good!
• What are your assets? OK!

Yup - now you're pre-qualified!   What does that mean?  Obviously nothing, nil, nada, zip! 

Here's a pre-approval:

• We discuss EXACTLY what you need
• I take a FULL application
• Your credit report is ordered and your scores and history are verified
• Your income and work history are checked and verified to the point required for the loan you want
• Same thing for your assets
• Then I send your application through DO or DU (electronic underwriting) to get you approved and see what the conditions are

Now, based upon all of that, I am able to let you know what you can get and issue pre-approval letters to those who need them.

See a difference?  That's right - in the second case the data provided is verified and your ability to get financing is proven.

Now, let's go look for your next Home!

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