These two terms are often confused or generalized as the same thing; which they are not. What differentiates them are the borrower received from the client to assess what they qualify for monetarily for a mortgage payment and purchase price. In the booming Charleston real estate market, 5 times out of 10, the listing agent will call the lender to ask probing questions pertaining to the potential borrower and could win or lose you a deal, if you are not working with a reputable, local lender like The Charleston Team. Listing agents disqualify the validity of online mortgage companies, due to their lack of knowledge of the Charleston area, laws and niche items that effect the home buying process.
A pre-qualification is based solely on what the borrower(s) verbally provides as evidence of their credit profile and is subject to the approval process, including further details such as a credit report, appraisal, and income verification. The information you provide won’t be verified as part of the pre-qualification process.
A pre-approval is a firmer commitment on behalf of the mortgage company and is a more formal process; which includes a credit check and even an employment verification, handled by The Charleston Team. During a pre-approval, The Charleston Team, does all the work of a full approval, except for the appraisal, title search and ordering of homeowners insurance. A credit report will be obtained by the lender to verify your monthly payments on installment loans and credit cards and to check whether you have a history of making your payments on time. You will also need to provide paystubs, W2’s/1099’s, tax returns for federal and all applicable schedules for self-employed borrowers, as well as statements for checking, savings and investment accounts to verify your assets available.
Getting pre-qualified or pre-approved by The Charleston Team is the first step in the home buying process and is incredibly important to help assess what price range you should be looking in, what loan programs would be best for your personal scenario and goals with the property and most importantly to present with your offer to the sellers, to show you are not only a qualified borrower, but a serious borrower for taking this important first step on the lending side.
However, neither a pre-approval nor a pre-qualification means you are guaranteed a mortgage. Lenders still need to look at property appraisals, verify information, and in many cases, re-check credit, employment status and receive updated statements based on the timeframe between the pre-approval and closing of the loan. The Charleston area is an incredibly special are to live and own a property, let The Charleston Team assist and guide you through the process, with years of proven success and an unparalleled reputation in a competitive market.