Pre-Qualified vs Pre-Approved

by | Nov 20, 2021

…There’s a BIG difference for buyers and sellers! 

When it comes to closing escrow, whether on a condo, home or land you are purchasing OR selling, the qualification process for both buyer AND seller can go smoothly OR hit a road full of potholes. Trust me, I know this from experience!

In the area of financing, the very best way to ensure that an offer is not only accepted, but the loan is approved and escrow closes on time, is in providing/receiving a pre-approval letter from the buyer’s lender. Often, what is provided is a pre-qualification letter. So, what’s the difference?

Pre-Qualification means that the potential lender asks the buyer questions about their financial status. For pre-approval, the lender pulls a full, or “hard” credit report, verifies income, assets, and other pertinent information, then runs the information through the underwriting process. A pre-qual may sound good, look good on paper, and check off the box on the purchase contract, but it may not reflect the real buyer financial profile to the degree of a pre-approval.

When buyers complete pre-approval before they begin the purchase process rather than toward the end, and then submit an offer, it will be a strong one because their loan is already pre-approved. Compare the pre-qual to the pre-approval in this way – Would you want to board an airplane without knowing that it has undergone a pre-flight check? Falling out of escrow can feel like a plane crash. Make sure you’re air-worthy before you leave the ground!

Attention Buyers!

Makai Mortgage, a part of Coldwell Banker Island Properties, is able to complete the pre-approval process is record-breaking time! Give me a call to chat about getting started!

What Clients Are Saying

“Jen was very proactive in all aspects of selling our property and found contractors to keep the property looking good throughout the listing period. She also provided advice throughout the process and was very helpful in getting the transaction done at a distance (we were on the mainland throughout the process). Her knowledge of the Hamakua Coast was very helpful in helping prospective buyers understand the regulatory and practical issues associated with shoreline properties.”

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