Are you pre-qualified or pre-approved for a loan?

Before you begin to shop for a new home, contact Troy Bank and Trust to speak with one of our mortgage professionals so we can figure out how much you can afford. Knowing this will put you in a better position as a buyer. It is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.

To get pre-qualified for a loan, we will collect information about your debt, income, and assets. We will look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. At that point, we will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you a competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.

To get pre-approved, you will complete a mortgage application and provide various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. Well review your mortgage options and determine the loan that best meets your needs. Once the application process is complete we will issue you a pre-approval letter indicating the amount you have been approved for your home.

The pre-approval is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise, or a specified expiration date passes, it will be necessary to review your situation and recalculate your mortgage amount accordingly.