Los Angeles Home Buyers .. Did Your Lender Say You Were Pre-qualified or Pre-approved?
While most people outside of the real estate industry don’t know the difference between those two terms, the fact is that they’re a world apart.
Pre-qualification doesn’t mean much.
You can be pre-qualified over the phone. The lender will ask a few questions about your income and expenses, your family make-up, and your current employment. He or she will ask if you have a bankruptcy or collections on your credit report and ask if you’ve had a foreclosure.
He or she will then give an opinion about whether you can buy and how much you can spend.
Notice that the lender didn’t verify any of what you said, so if he gives you a letter it will include disclaimers that basically say “If everything I’ve heard is true, you’re qualified for a loan to purchase a house for X number of dollars.”
Pre-approval is what counts when you’re submitting an offer.
Before a lender will give you a letter of pre-approval he or she will check your credit report, then verify everything you’ve said. He’ll review your bank statements to see that you do have enough money for the down payment and closing costs, and check to see that no large, unexplained sums of money have been deposited recently. She’ll verify that you’ve been on your current job for a while – earning what you say you earn. He’ll look at past tax returns.
Once you’ve been pre-approved you’ll know how much you can borrow and at what interest rate.
That’s a huge advantage to you when you’re shopping, and a huge advantage when you’re submitting an offer. The seller doesn’t have to gamble with taking the house off the market while wondering whether or not you can actually complete the purchase.
When you’re thinking of buying a new home here in Los Angeles, call me. I can give you a list of trustworthy lenders who have served my clients well. Any one of them will be happy to get you pre-approved and ready to submit a solid offer. And then, I’ll be happy to help you find a home that fits your budget.
Are you considering a move in the near future? Powerhouse Real Estate is here to help you before, during, and after the process. Darryl has prepared an e-book “Home Seller’s Guide to Money Making Fix-Ups” that we would like to offer you or anyone you know.
Visit our office at 433 N. Camden Dr. Suite 400, Beverly Hills, CA.