Pre-Approval Process

The First Step 

A Pre-Approval is the most powerful tool a buyer can use to prove their ability to purchase a home. A buyer with a Pre-Approval means less surprises or problems! Anyone who wants to buy a home in today’s market should first review their financial situation with a lender. The understanding of how much can be borrowed reduces the possibility of problems later. 

There is a big difference between a letter of pre-qualification and a letter of pre-approval, and it is important that you understand this difference before we start looking at homes.

The Definition of a “Pre-Qualification”

When a lender grants a buyer a “Pre-Qualification”, it means the lender has reviewed the buyer’s finances and has done a basic calculation to determine how much that buyer may be able to borrow. While pre-qualification can reduce the processing time for home loans, it does not guarantee that a loan will be made by a lender.

The Definition of a “Pre-Approval”

When a lender grants a buyer a “Pre-Approval”, it means the lender has actually approved the loan with only two additional requirements. First, that the buyer chooses a home to purchase, and second, the home the buyer chooses appraises at or above the sales price. The “Pre-Approval” letter represents an actual commitment on the part of the lender. In order to secure such a letter it is necessary to complete a formal loan application and pay the associated fees. Credit, salary and bank funds will be checked, and if the loan is a good investment, the lender will issue a pre-approved letter that provides a commitment for a period of time, subject to a satisfactory property appraisal and title search.

In order to purchase a home, you must either have the funds available or a pre-approval from a lender. If you do not have a lender to work with, please contact us and we will get you in touch with one of our qualified lending partners.

Contact Us today to setup an appointment with The Orlando Metro Realty Team to see how we can help!

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