"Pre-qualification is quick and informal, relying on a buyer's account of income, assets and debts. It offers a rough estimate of purchasing power without requiring documentation or a credit check. For buyers still exploring possibilities, it can be a useful first step. It answers the what if questions that arise when moving is more of a curiosity than a commitment."
"When the decision to buy is certain, pre-approval moves the process into high gear. This step requires collecting pay stubs, tax returns, bank statements and identification, along with a credit pull, which is not only required but highly recommended. Reviewing your complete credit history and accounts allows us to calculate your true purchasing power with precision. My team and I invest several hours carefully analyzing credit reports, verifying all documents, structuring your file and having one of our underwriters review it in advance."
"That couple's story is common and it's exactly why the distinction between pre-qualification and pre-approval matters. When details are confirmed up front, underwriting moves faster and the risk of a deal falling apart after an accepted offer drops dramatically. Without that clarity, surprises like an income source that doesn't qualify, can stall or even sink the transaction. Lenders follow strict guidelines when calculating what you can borrow."
Pre-qualification provides a quick, informal estimate based on a buyer's stated income, assets and debts without documentation or a credit check and suits early exploration. Pre-approval requires pay stubs, tax returns, bank statements, identification and a credit pull, enabling precise calculations of purchasing power. Detailed credit review and underwriter pre-checks streamline underwriting, create stronger offers and speed closings. Missing documentation or income that doesn't qualify can stall or sink transactions. Lenders follow strict guidelines when calculating borrowing capacity, and variable income sources such as bonuses or overtime may not count toward qualifying income.
Read at www.housingwire.com
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