Question:

What is the difference between prequalification, preapproval and final loan approval?

Answer:

Prequalification, preapproval and final loan approval are different stages in the mortgage application process.

Prequalification is an unofficial stage when you supply general income and debt information about yourself to your lender so that they can calculate for you what kind of a mortgage program you can afford and is best for you. None of the information is verified at the time.

Preapproval is the next stage at which your assets, liabilities, personal and employment information will be verified and hopefully the mortgage will be approved.

Final loan approval is the last stage - at that time all necessary documentation has been gathered and presented to the lender, property appraisal is complete and all contingencies have been met.

Usually, it is advisable that you get prequalified and preapproved by a reputable mortgage company even before you go shopping for new property since in this way you and your realtor will have better idea of the value range.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Why: Find your next home and save money.
Link: Search thousands of foreclosures. Free 7-day trial.
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage