Real Estate, Business Law, Non-Profit Law

Schedule a Consultation

Call Us Today (314) 862-2237

  • Home
  • About Us
    • Mission Statement
    • Marc Jacob
    • Jace Brotherton
    • Firm News
  • Real Estate
    • Real Estate
    • Commercial LL – Tenant Law
    • Real Estate Litigation
    • Lawyer to Buy A House?
    • Motel/Hotel Purchases and Sales
    • Tenants Rights Law
    • Quiet Title Lawsuit
  • Business Law
    • Business Law
    • General Counsel
  • Not-For-Profit
  • Law Blog
    • Law Blog
    • Legal Resources
  • Contact Us

What is the Difference Between a Pre-Qualification and a Pre-Approval?

September 16, 2015 by Marc Jacob

For Buyers who need financing to purchase a home,  the home purchase contract may give them some time to get a “Loan Commitment” or “Loan Approval.”  The Buyer must get either of these before the Loan Contingency Deadline.

In addition to these terms, there are other terms that often get thrown into the mix, and that are helpful to understand. There is some variation across lenders, and the definitions below may not fit all lenders.

Pre-qualification means that the lender evaluated the potential borrower’s financial picture based only on information the borrower provided, and indicated the mortgage amount for which the borrower could possibly qualify. The lender has not reviewed the potential borrower’s credit, or any other supporting documentation.

Pre-approval is a different term and is somewhat more involved. To get pre-approval, the lender verified the potential borrower’s financial background, checked their credit, and reviewed the mortgage application and other supporting documentation. If pre-approved, the lender can provide the potential interest rate that the borrower would qualify for and may also allow them to pre-lock a rate.

 Although a borrower may get a “Pre-qualification” or a “Pre-approval,” it is the Loan Approval or Commitment that are really the important benchmarks when it comes to the loan contingency deadline.

A borrower will therefore want to discuss with their lender what is required to get documentation that assures that the lender will provide financing.

A lender may not want to discuss appraisals or final underwriting until it gets closer to closing. This can be an area of contention between the borrower and the lender. If the lender has not finished underwriting, but has issued the approval or commitment, the borrower may be on the hook to purchase the house even when the bank is not yet fully committed to funding.

For this reason, we suggest that borrowers discuss the issue with an attorney if their lender is not willing or able to give them a satisfactory commitment or approval.

If you have questions about obtain a loan commitment or approval, please contact us at mjacob@marcjacobesq.com or at 314.862.2237

Filed Under: Real Estate

Primary Sidebar

Recent Posts

  • Tax Sales & Title Issues in St. Louis County
  • GUEST BLOGGER: Retirees Looking To Homestead Can Use These Tips For Buying A Property
  • Commercial Leasing For Small Businesses
  • How Do I Start a LLC in Missouri?
  • Why Should My Lawyer Review the Home Inspection?

Categories

  • Business Law
  • Quiet Title Suits and Tax Sales
  • Real Estate
  • Uncategorized
The Jacob Law Firm,LLC Missouri-Kansas-Super-Lawyers-Rising-Stars

THE CHOICE OF A LAWYER IS AN IMPORTANT DECISION AND SHOULD NOT BE BASED SOLELY UPON ADVERTISEMENTS. Information provided on this website is for informational purposes only, and should not be construed as legal advice. Transmission of information from this website or via internet email from this website does not create an attorney-client relationship, nor is it intended to create such a relationship. Links to sites maintained by third parties are for your convenience, but those sites are not endorsed by this law firm. The Jacob Law Firm, LLC also does business as Home Sweet Legal.

Contact The Jacob Law Firm

Putting Clients First. All of our Clients receive the personal attention they expect and deserve.

The Jacob Law Firm,LLC Super Lawyers Logo

Marc Jacob, Esq.
141 N. Meramec, Suite 201
Saint Louis, Missouri 63105
Tel: 314.862.2237
Fax: 314.884.6041
Email: mjacob@marcjacobesq.com

The Jacob Law Firm,LLC Map

Contact Us

Recent Posts

  • Tax Sales & Title Issues in St. Louis County
  • GUEST BLOGGER: Retirees Looking To Homestead Can Use These Tips For Buying A Property
  • Commercial Leasing For Small Businesses
  • How Do I Start a LLC in Missouri?
  • Why Should My Lawyer Review the Home Inspection?

Categories

  • Business Law
  • Quiet Title Suits and Tax Sales
  • Real Estate
  • Uncategorized

Copyright 2015-2023 by Marc Jacob Esq. All Rights Reserved. // Privacy Policy // Site By: The Attorneys ATM. The Jacob Law Firm, LLC also does business as Home Sweet Legal ®.

  • Home
  • About Us
    • Mission Statement
    • Marc Jacob
    • Jace Brotherton
    • Firm News
  • Real Estate
    • Real Estate
    • Commercial LL – Tenant Law
    • Real Estate Litigation
    • Lawyer to Buy A House?
    • Motel/Hotel Purchases and Sales
    • Tenants Rights Law
    • Quiet Title Lawsuit
  • Business Law
    • Business Law
    • General Counsel
  • Not-For-Profit
  • Law Blog
    • Law Blog
    • Legal Resources
  • Contact Us