What Does Pre-Qualification Mean for a Home Loan

One of the terms that can confuse first time home buyers is "pre-qualification". 

What does it mean to be be pre-qualified for a home loan?

Well, the short answer is not much. All pre-qualification means is that a lender has provided a written opinion of the ability of the borrower (first time home buyer) to qualify for a home loan. The loan officer will ask a series of questions about debt (credit cards, car loans, student loans, etc), income, and savings and will make a professional opinion on whether or not the buyer will qualify for a loan. There is no formal application process and the lender can only make a decision based on the information given. 

Getting pre-qualified is good for the buyer to get an idea of what they may be able to afford. When they are ready to take the next step and put an offer in on a home a pre-approval is what will make the difference. A pre-approval happens after the buyer formally applies for a loan and the bank does a more in depth, formal look into the buyer's ability to actually purchase a home.

While pre-qualification is an important first step to take in the home buying process  the pre-approval is what truly matters, especially in markets where the homes are selling quick! A pre-approval is a firmer guarantee for a home seller that a home buyer is able to secure a home loan.

If you are thinking about purchasing a home in Downtown Columbus or the surrounding villages and neighborhoods then contact us today. We have a list of solid, reliable lenders who have years of experience to help you get the home you deserve.