Pre-Qualifying for a Mortgage

Lender letters come in two general types, pre-qualification letters and pre-approval letters. A pre-qualification letter is often the first step in the approval process and is usually fairly quick and easy to obtain. It can be issued while documentation and information is being submitted and verified for the pre-approval letter.

This type of letter is from a lender who has done a basic review of your financial situation and based on the results believes that you will qualify for a loan. In other words they are simply stating that they haven't found any negative information that could prevent you from getting a loan. It is usually issued by a loan officer after an initial interview and credit check. However, as no verification of information has been completed, the pre-qualification letter is an opinion only, and the lender is not bound to make a loan when you are ready to buy.

The letter is used when you are making an offer on a home and indicates to the seller you are qualified to purchase the property based on the information you provided the lender and subject to verification. There is no guarantee you will actually qualify for the loan amount for which you have been pre-qualified.