One of my home buyers found a property a few days ago that he wanted to make an offer on. I told him that we needed to submit his mortgage pre-approval as part of the offer. Yesterday I received a call from someone at his mortgage company informing me that he would be faxing me a mortgage pre-qualification. I explained that we needed a pre-approval, not a pre-qualification. There’s a big difference.
A mortgage pre-qualification is a mortgage company’s opinion of how much they can lend you based solely on what you’ve told them. It’s value as part of an offer is worthless.
When making an offer on a home, you should submit a mortgage pre-approval which shows that the mortgage company has verified your credit, employment, assets and liabilities and is willing to approve a mortgage assuming the home appraises for a sufficient amount.
My home buyer thought all along that he had been pre-approved. Now he’s in the unfortunate position of having to wait a few days for the pre-approval so he can submit it with his offer. Hopefully, no one else will have made an offer before then.
From now on, when my home buyers use a mortgage company that I am not familiar with, I will confirm that they are pre-approved.
ABOUT THE AUTHOR
Fran Bailey shows, previews and tracks downtown Chicago homes for sale giving her the insights needed to help her clients negotiate the best price and terms. Fran has been quoted in numerous Chicago and national publications. To schedule showings of listings regardless of broker or to contact Fran email her at fran.bailey@bairdwarner.com or call 773.793.4516. Learn More
Fran Bailey, Realtor
