Pre-approval letter
Loan commitment letter, approval


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What is the difference between pre-qualifying and pre-approval?

Choice Finance® will generally not issue a "pre-qualification".  We do issue a Pre-Qualification Letter in Virginia where the State Regulatory Agency has put out an advisory to do so.  Too many mortgage companies and their Loan Officers are willing to issue this type of letter after a brief phone interview with the borrower (you). 

The Loan Officer is eager to get your business, so he is very hesitant to make you fill out a complete application, pull 3 credit scores, and receive in-hand your necessary income and asset documentation.

This is a huge dis-service to you, the seller, and the Realtors® involved.  This is where many Loan Officers are negligent.  Two things tend to happen when this approach is taken:
1)
The borrower is promised a rate and program that she doesn't qualify for.  The borrower then doesn't find out she will get a higher rate, with higher fees until it's too late.  This mortgage company knows she isn't going with anyone else at this point... and they know she is legally obligated by her sales contract to purchase the property.

2)
The borrower ends up not qualifying for the home at all.  The borrower waits 15 or more days to find out she does not qualify.  The seller is now in a huge bind.  They in turn may sue you the buyer, the Realtor®, and her Loan Officer.

Bottom line, be very careful of any mortgage company who does not do their due diligence up-front to make sure they have a loan in hand.  Choice Finance® has seen too many clients who thought they were getting a better deal some where else, only to get completely jerked around because of that other company's lack of diligence upfront to make sure they could deliver what they promised.

A mortgage pre-approval letter is a step above pre-qualification.  A pre-approval involves verifying your credit, down payment, employment history, etc.  Your loan application is submitted to an underwriter and a decision is made regarding your loan application.  If your loan is pre-approved, you are then issued a pre-approval letter.  Getting your loan pre-approval allows you to close very quickly when you do find a house.  A pre-approval can help you negotiate a better price with the seller, since being pre-approved is very close to having cash in the bank to pay for the house!

Choice Finance® is a lender.  We have underwriters who are staffed in our corporate location.  Once we have all necessary documentation from you, we will be able to have an Underwriter issue you a full loan approval, known as a Commitment Letter.  This letter will put you ahead of the pack when it comes time for the Seller to review contracts.  Let's say they have 10 contracts... it's almost a given that yours will be the only full commitment to lend, while the others are Pre Qualification Letters (garbage) and Pre Approval Letters (decent). 

Make your Realtor®, seller, and seller's Realtor® happy! Why take a chance when you have a Choice (Finance)?

 

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