Mortgage Pre-Approval and Qualifying

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A pre-approval is one of the first steps in determining how much you can afford for your new home purchase. Think of it as your golden ticket or the go-ahead to start making offers on homes.

Many new homebuyers walk into the process without a lot of information on mortgage rates, total costs, or their down payment options. A pre-approval can give you a better understanding of what type of loan you’ll qualify for, your purchase price range, interest rate, and more importantly your estimated payment.

By getting pre-approved upfront, you'll feel prepared, and it will also let sellers and real estate agents know you're serious about buying.

There are different types of pre-approvals or pre-qualification offers. You'll want to determine which one is best for you (learn more about the differences between the two below).

To start the pre-approval process, you can submit an application online or reach out to a Home Loan Consultant.

Understanding what it means to be pre-qualified, pre-approved and fully credit approved

Sometimes these terms are used interchangeably, but they can have different meanings to various lenders, and each one carries a different level of weight and clout. We'll explain how we define them below.

Where to start?
Depending on where you are in your homebuying and financing journey, you'll probably want to start in chronological order – by getting pre-qualified, then pre-approved and/or fully credit approved (optional).

To make offers on homes, you'll need to be pre-approved. If you’re ready to buy and move in within the next few months, a full credit approval can give you an advantage over other buyers. A full credit approval is not required to make offers but think of it as a fast pass to speed up the process, or as the extra icing on top of the cake.

Here's the breakdown of the benefits and differences between a pre-qualification, pre-approval, and full credit approval.

	Pre-qualification	Pre-approval	Full credit-approval
Overview	An estimate of how much you can borrow	Preliminary review of how much you can borrow	Complete review of your loan upfront; Conditional loan approval
Process	Typically a quick conversation with a Home Loan Consultant	Submit an application, reviewed by Home Loan Consultant	Submit an application, reviewed by Home Loan Consultant + Underwriter
Documentation	No documentation provided	Application Hard credit pull ¹, income and asset documents	Application Hard credit pull ¹, income and asset documents + Underwriting review
Expiration	N/A	120 days from date issued (may need updated documents)	120 days from date issued (may need updated documents)
Bottom line	Idea of what you may qualify for; good if you're starting the process	Required for making offers; shows that you're serious as a buyer	Best type of approval with greatest confidence; speeds up process

What is the benefit to getting a full credit approval?

You will likely save time on the financing process once you've found a home, plus you'll have the most accurate view of your loan amount, terms, rate, and payment. A full credit approval confirms your loan application and credit documentation have been verified by our underwriter.
This means if you're making offers on homes, you've already checked off some of the boxes for your financing, so you're one step ahead. Assuming your credit profile remains the same, your loan is only subject to verification of a few final items related to the property you’re purchasing.
This type of approval also shows extra strength as a buyer and may help you stand out to the listing agent and other potential buyers. You may also be able to negotiate a faster closing since your loan will not have to go through an initial underwriting review again.

What role does an underwriter play?

An underwriter is someone who works on our team behind the scenes to thoroughly review your loan application, credit, income, and assets and that all is aligned with the type of loan you're applying for. They will work closely with your Home Loan Consultant, issue a final decision on your loan, and/or request any additional information or clarification that may be needed for their decision.

How long does the process take from pre-approval to closing?

In a competitive housing market, it's normal for buyers to make several offers on homes and get outbid. That's why getting pre-approved, or fully credit approved is important. From the point you're pre-approved, it really depends on how quickly you're able to find a home. Once you have found a property, we can typically close within 30 days or sooner. Many times, your Home Loan Consultant and real estate agent will work closely together to negotiate your best offer.

Will I receive a formal pre-approval letter?

Yes. Once you've been pre-approved or fully credit approved your Home Loan Consultant will send you a formal letter which you can share with your real estate agent. They'll send the letter to the listing agent and seller along with your offer.

Connect with a Home Loan Consultant

Buying a home is an important milestone and one of the biggest financial decisions you'll make. But it can be stressful if you're unsure of what to expect.

Our Home Loan Consultants will answer all of your questions so you're well prepared and informed every step of the way.

Whether it's your first home, a vacation property or an investment purchase, our Home Loan Consultants will meet with you to discuss your plans and goals and help you get pre-approved for the home you'll love.

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