Let's keep this one simple
PreApproval - Credit Assets Debt and Income are reviewed, calculated, and Pre-approved by an Underwriter. Anything less is a Pre-Qualification regardless of what it is called.
Why does it matter?
It provides assurance to you, your realtor, and the seller that your loan will go through. It's not a guarantee but it's the closest to a full approval you can get prior to contract. It makes you a surer bet and that's what everyone wants. To close on the home.
Is a Pre-Qualification acceptable?
To get a prequalification letter you need to atleast have a completed application which includes a credit report and scores. Therefore, a loan officer can issue a prequal letter because they have a stated income and assets along with debts and credit scores. The difference is that documentation is not yet reviewed by an underwriter and underwriter guidelines to determine actual numbers and ratios. This could leave a buyer in a vulnerable situation. So it is usually enough for a realtor to show homes and to make and offer.
Intercontinental Capital Group, Inc.
6100 Fairview Rd #560 Charlotte, NC, 28210