Are you Pre-Approved or Pre-Qualified for a Purchase Loan?
Before you begin to shop for your new Chicago purchase loan, you should set up a time to meet with me so we can figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between Pre-Approved being for a loan and Pre-Qualified for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.
To get Pre-Qualified for a Chicago Purchase Loan: I will collect information verbally about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you.
It is important to understand that a Pre-Qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting Pre-Approved for a purchase loan gives you a competitive advantage when the time comes to bid on a home because you've been approved for a specified amount (whereas other prospective buyers may only have been Pre-Qualified).
To get Pre-Approved for a Chicago Purchase Loan: You will need to complete a mortgage application and provide me with various information verifying your employment, assets, and financial status, such as W2 forms, bank records, and credit card statements. We'll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete, you will recieve a Pre-Approval Letter indicating the amount the lender is willing to lend you for your home.
A Pre-Approval Letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.