MaryAnn Morrar
MaryAnn Morrar


Are you ready to tour homes?  It is great to look on-line however, it is much better to see the homes in person.  Contact me to set up an appointment 858-603-2895

Get your Free Buyers Guide of thing to consider when buying a home

Pre-Approval vs. Pre- Qualification – Are they so different?

A pre-approval is a starting place.  Most buyers use a loan to purchase a home.  To get a ballpark idea of your purchasing power (how much house can you afford), you get a pre-approval.  You call or visit your local lender.  The lender then, based solely on the verbal information supplied by you, will give you an estimate of your purchase price.  Many banks go as far as writing up a letter stating you have been pre-qualified for a purchase price of X amount of dollars based on the information provided.  Then somewhere in the letter, it will say “subject to a formal loan application”.   How much weight do Sellers give a pre-approval?  Little, if any.

What is so different about a pre-qualification letter?  It is based on verified facts.  To start, you fill a formal loan application.  The lender runs a credit report.  You supply the lender with tax returns, bank statements and pay stubs.  The loan is then underwritten.  Once the bank has finished reviewing your complete loan package only then will he provide you with a pre-approval letter.  This letter is a commitment to make a loan, subject only to a fully executed purchase agreement, an appraisal, a preliminary title report and no changes in the applicant’s credit worthiness.  When the seller receives a pre-approval letter, he knows you are a serious buyer with the ability to purchase his home.

Pre-Approval – over the phone estimate, a guess with the hope everything checks out.

Pre-Qualification – a formal evaluation of your ability to purchase a home.

Do you need a pre-qualification letter to make an offer?  No.  However, as a Buyer, you want the seller to seriously consider your offer.  You want the seller to want to accept your offer and not have doubts about your ability to purchase.  Many times buyers are in a multiple offer situation, the offers that get the most attention are the ones with pre-approvals.

Bottom line Be a Smart Buyer – Get fully Pre-Approved before you make an offer.