Bruce Garland

What do Pre-qualifying and Pre-approving Mean?

Pre-qualified and Pre-approved are just two of the many terms one can hear when applying for a home loan. What do these terms mean and what is the difference between the two? We have explained below.

When we apply for a home, we often hear our agents saying that we are pre-qualified or pre-approved. However, not many people know what these words mean. If you have plans to buy one of the Boston luxury apartments then you should know the differences by now.

Pre-approval is the stage when the lender sends you a document confirming you a loan up to a certain amount based on the application form you have filled up, credit check, and maybe on your tax returns and employment verification.

Pre-qualification, on the other hand, is a letter sent by the lender stating that they can lend you an amount based on the information of your financial situation you will provide to the lender during your meeting.

However, neither of these two documentations is a guarantee that the lender can give you the loan amount in a short period of time. This is because everyone’s financial status can dramatically change as the loan closing date comes closer.

Therefore, if you chose to buy a house over renting an apartment from the available Boston luxury rentals, it is important to note that you are subject to a last minute credit check as well as fund verification along the way until the closing date comes. However, if you didn't have any problems with your finances throughout the escrow period like you were able to keep your job, maintain a good stream of income and the like, you need not worry about the last minute credit checks and your loan will most likely be granted.

Now that you know the difference between the two documentations, always keep in mind that these documentations do not require the lender to grant a loan or you to take your desired loaned amount. The moment you receive these documentations, this only means that you can now take the first step in submitting your offers.

It is also important to note that, you will not be approved on your home loan until you have found the house you want to purchase.

If you find it too complicated, you can opt to rent an apartment instead. Fenway apartmentsare just a few of the many great places to stay while in the Boston area. The process for renting an apartment in Boston is a lot simpler than applying for a home loan. Furthermore, renting has some unique advantages, such as not needing to worry about property taxes or potential things that could go wrong with the property.

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