Now, some Loan Officers say "pre-qual" and "pre-approved" mean just about the same thing. Whatever you think, always let your borrower know what you mean by either term, don't assume they know. If you think there is a distinct difference between the two, good. Again, don't assume your knows the difference.
For purposes of this article, a "pre-qual" is NOT a pre-approval. In other words you don't have to get their SSI numbers, which IMHO, is the main difference in the information you gather between the "qual" and the "approval."
For you to pre-qual someone, you're telling them "Based on the info you've given me, I ran the numbers and this is the amount of mortgage you qualify for." Also make sure they understand an underwriter has NOT underwitten the deal. Also, put a disclaimer on any documentation you give the borrower saying something similar as well. You don't want any confusion about the borrower thinking they are approved for anything yet, because they are not.
One thing you should always do is ask about their debt situation. That will give you an in to start asking more indepth questions about their credit if it's on shakey ground. This also gives you an added boost in terms of being the "expert" in your borrower's eyes.
This was on my mind, so I wanted to write about it.
Comments(3)