Prequalification vs. Preapproval

When you are looking for a Mortgage, you may think that “prequalification and preapproval” are interchangeable terms. But they have different meanings.

A Prequalification is just that. Based on the information you have provided to your mortgage professional, they make an estimate of how much of a mortgage payment you can afford. The Prequalification is based off how much information you provide, and is always subject to further verification-Credit Report, Income verification, Appraisal of the property, and a clear Title to the home.

A Preapproval is a more firm commitment from your mortgage professional, and is more in depth. Your credit report will be analyzed, along with your proof of income, including paystubs, W-2’s and even Tax Returns. During the Preapproval process, much of the same steps are taken as in a full approval, minus the appraisal and title work. Even still, we at Gold Standard Consulting will contact a local appraiser and get their expertise of the value of the home before issuing a preapproval. A Preapproval is always subject to Final Approval from the Underwriter.

Now That You Are Preapproved
The verification process begins. This process normally takes about 3 weeks, but can be longer for more complex loans. We will ask you for any additional document needed from you, order a Title Report on your property, and arrange for an appraiser to come and inspect your home. You have the choice of which Title company and Appraiser to use, as long as they are reputable, and approved by your lender.
Once all of the documentation is received, your information is sent to an underwriter. The job of an underwriter is to look at your entire profile- and make a decision. He or she will analyze your credit report, income, title report, and appraisal to ensure everything is correct and that you meet the credit guidelines.

You Have A Final Approval - Now What?
Congratulations! You loan is now Clear to Close. You are now ready to move forward with settlement.

Settlement
You will need to be at settlement, as well as anyone else who will be a borrower on the new loan or the title to the home. In some states, your spouse will need to be there, even if they are not on the title or the note to the home. You will need a copy of your driver’s license as proof of identity.
The closing package may seem daunting, but it is very important that you understand what you are signing. Ask Questions! Your mortgage Note will tell you your Loan Amount, Interest Rate, and if it is a Fixed Rate, and the date of your First payment. If something has changed let your settlement officer know and you can contact us immediately. In some cases human errors occur and should be able to be fixed with relative ease.

The Team at Gold Standard Consulting is dedicated to making your Refinancing Process as smooth and seamless as possible. For a worry-free mortgage, contact the Experts at Gold Standard Consulting Today!

 Lyn Graham
Branch Manager
Gold Standard Consulting
888-507-5770