I want to clarify some mortgage lingo.  I had a Realtor get mad at me this summer because I poured out some terms that she did not understand and she thought I was trying to talk over her head and I was not.

I am going to do this in several different blogs and feel free to write or call with any questions.

this is a big one...

Pre-Qualified- Really means little to nothing.  Pre-Qualed is another popular term for it means that a mortgage rep from an investor has looked at the credit report and mortgage application and determined that it fits her companies guidelines.  A loan officer can do the same thing and many do, but really it means nothing in the grand scheme of things cause the bank statements, w-2s or any financials have been looked at yet.

--my personal opinion this was a biggie for the sub-prime set, and really not worth the paper they are written on, but  that is my opinion and I could be wrong.

Pre-Approved- A stronger form of pre-qualified.  The applicant has been interviewed, and have been run through Fannie Mae and it meets all of the computer assessed requirements.  Now, this does not take into consideration is what if the applicant lied thinking they can sneak something through.  There are still things that can go wrong, but they meet all of Fannie's requirements for their products.  Most mortgage professionals rely on this, but we like to see financials before we put our name on a pre-approval.

--IMHO, this is solid if the LO has done their homework

Approved-has gone through an underwriter and the borrower is good to go, all we would need to worry about now is the house and title.  Approvals are basically good for 30 days and then the bank statements or other financials are going to need resubmitted to make sure the reserves are still there.

--Approved buyer find them a house NOW

In todays ever changing mortgage credit climate it is imperative to work with a professional who will help and teach the client on how. what and when to do it. 

Dave Woodson

Your Mortgage Consultant for Life