San Diego home buyers understandably get these two terms confused, but there is a great difference.
Anyone can become prequalified over the phone, with no documentation. You simply tell the mortgage lender about your situation and he or she says “I think you can” or “I don’t think you can.” The lender might also give you an estimate of how much you can afford to pay for a home, but it is not a guarantee of a loan.
Pre-approval comes only after the lender has verified the information you provide and checked your credit report. Your pre-approval letter IS a guarantee that unless things change, you will be given a loan for up to a specified amount.
That “unless things change” disclaimer is the reason why your buyer’s agent will advise against doing anything to change your financial picture once you’ve been approved.
That includes making purchases on credit cards, letting any vendor check your credit report, failing to pay a bill on time, changing employment, or withdrawing funds from your savings account.
Don’t even pay off an old account without first getting advice from your lender.
Do you need a San Diego mortgage lender?
Yes, a local lender will be far more responsive to your needs than any Internet lender.
If you’re ready to begin your San Diego home search and don’t have a mortgage lender, get in touch. We’ll be happy to provide you with a list of local lenders who have served our clients well.
And then – we’ll be pleased to help you locate and purchase that new San Diego home!