Pre-Approval vs Pre-Underwriting

When buying an Inland Empire home in the past, you may have heard about pre-qualifying and pre-approval. In today’s highly competitive real estate market, most sellers will not even look at an offer if the buyer does not include a pre-approval letter. But, there is something even better than a pre-approval letter. And that is pre-underwriting. So, what is the difference between the two?

Pre-Approval vs Pre-Underwriting

Pre-Approval

When you go through the pre-approval process, you fill out your initial loan application with your lender. Then, you provide them with bank statements, paycheck stubs, tax returns, and any other financial documentation they request. They verify your employment status and run a credit check on you. Using all of this information, they determine if you 1) qualify for a mortgage loan and 2) the maximum amount you qualify to borrow.

Pre-Underwriting

After all of the pre-approval process ends, your loan then goes to underwriting. The underwriter conducts a more thorough audit of all the information you provided in the pre-approval process. It also takes a longer amount of time. Therefore, if you can get your loan as far as possible in pre-underwriting before you even write an offer on an Inland Empire house, your time in escrow shortens up. This makes an antsy seller very happy!

When you deal in a highly competitive seller’s market like ours here in the Inland Empire, you want your offer to look as good as possible. Pre-underwriting helps with this endeavor. However, since this is a relatively new option, some lenders do not offer it. For this reason, you need to ask your lender about it first thing.

After you get your financing together, contact me. I’d be happy to show you what’s available in your price range here in the Inland Empire. I look forward to hearing from you soon!

Muna Dionne, your Inland Empire specialist with Coldwell Banker Realty