Pre-Approval, what does it mean and how is it advantageous?
We believe it is very important for Nations Lending’s clients to understand the difference between a “pre-qualification” and a “pre-approval.” Currently a sizeable portion of real estate transactions involve “all cash” deals, with some lenders providing a pre-qual or pre-approval to borrowers in order to negotiate on a more equal footing with all-cash buyers.
In general, a pre-approval is a written statement from Nations Lending stating its preliminary determination that a borrower would qualify for a particular loan amount, at what rate, and what the terms look like under that lender’s guidelines based on income and credit information. The biggest advantage of pre-approval is that our borrowers will have an accurate idea of how much money they would have to work with, and this can help to target the home search and ensure Nations’ borrowers only look at houses that are truly in their price range.
As mentioned above, being pre-approved by Nations Lending also allows you to shop like a cash buyer, both you and the seller can be reasonably confident that the money will be there if you decide to buy. A pre-approval letter also helps you prove to real estate agents and sellers that you’re a credible buyer who is able to act fast when you find the home you want to buy.