Buying · Pre-approval
A pre-approval is a position, not a formality.
When two offers are close, the letter attached to them stops being paperwork and starts being the deciding factor.
Prequalification and pre-approval are not the same thing
A prequalification is generally based on what you told someone, often in a few minutes, without documentation. A pre-approval means a lender has reviewed actual documents: income, assets, credit. Experienced listing agents can tell the difference at a glance, and they advise their sellers accordingly.
| Prequalification | Pre-approval | |
|---|---|---|
| Based on | Stated information | Reviewed documentation |
| Credit reviewed | Sometimes | Yes |
| Time required | Minutes | Longer, and worth it |
| Weight with a listing agent | Limited | Substantial |
What to have ready
- Recent pay stubs, or business documentation if you are self-employed
- Two years of tax returns and W-2s or 1099s, where applicable
- Recent statements for the accounts your down payment will come from
- Identification, and an explanation for any large recent deposits
If something in that list is complicated, that is exactly the reason to start early rather than later. Problems found in week one are solvable. The same problem found in escrow is a crisis.
Pre-approval is not a commitment to lend. Final approval is subject to credit, income and asset verification, property appraisal and program guidelines.
Get your number before you fall in love with a house
Alex can walk you through pre-approval directly, or work alongside a lender you already have. Either way, get it done first.