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Taking the first steps toward homeownership can be daunting. Granted, you are making one of the biggest purchases of your life. The first two steps to making your American Dream come true is completing the conditional pre-qualification and conditional pre-approval process. But what’s the difference? Before you scratch your head in confusion, we are going to break it down so that you know exactly what happens in each process.
What is the Conditional Pre-Qualification Process?
This process is based on the information that the prospective applicant has provided to the lender. The lender will then determine that the prospective applicant is eligible and qualified to meet the financial requirements of a mortgage loan amount up to a certain amount. It is important to note: This is not an approval for the loan. This process is merely giving the borrower an estimated loan amount they could potentially qualify for.
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What is the Conditional Pre-Approval Process?
This is where the loan has been reviewed by the underwriter. Based on the borrower’s current credit report, income, and assets, the underwriter will pre-approve the loan. Pending the underwriter conditions have been met, the borrower has been pre-qualified up to a certain loan amount.
Keep in mind, these two processes are just a way for the lender to estimate how much home you can afford.
What is a Loan Approval?
This is where all underwriting conditions have been met. The loan is usually cleared to close at this point.
Still, have questions? We are here to help answer them and guide you down the path toward homeownership. Together, we will help you to build your budget, navigate the process, and apply for a loan. Contact us today here.