Pre-Approval vs Pre-Qualification
A pre-qualification is an opinion rendered by a loan officer. It typically comes after a loan officer meets with the customer, gathers information, runs the customer’s credit, analyzes income and asset information and formulates an educated opinion of the customer’s ability to obtain a loan.
A pre-approval is obtained after the customer has completed a loan application, paid an application fee; the loan is processed and underwritten by a mortgage bank or depository bank. The resulting approval is typically accompanied with “loan conditions” that when met, will result in the granting of a home loan. It is only a “pre-approval” in that it does not yet have a subject property.
The significant difference is one is an opinion and the other is written commitment to lend.
In today’s lending environment, most lenders no longer offer pre-approvals and will not allow a loan application into their system without a subject property. Instead, they rely on their individual loan officers to issue pre-qualification letters as an opinion of credit worthiness. This decision is driven mainly by cost as the pre-approval requires a loan to travel nearly the entire length of the lending process where most of the costs are incurred by the lender.
A Mortgage California Pre-Approval
Mortgage California is a registered DBA of RMR Financial, LLC. We are licensed by the Department of Corporations under the California Residential Lending Act, License #415-0027. This license was granted in 2001; however, our heritage goes back much further.
Mortgage California is a subsidiary of PHH Home Loans and PHH Corporation. The parent firm (NYSE: PHH) is a publicly traded company that specializes in mortgage banking and leasing services. A nationwide lender, PHH Mortgage is one of the top five originators of retail residential mortgages in the United States.
Please contact me at 415.806.2670 or email me at johnballadares@mortgagecalifornia.com to get more information about the pre-approval process.
Comments(0)