Pre-qualification Vs. Pre-Approval

         A pre-qualification is merely the homebuyer giving me the information. “I make $8,000 a month. I have $800 in debt. I have a 720 credit score.” 

           Based on what you’re telling me, yeah, you’re pre-qualified to buy a home. I would never write a contract on a pre-qualification. And as a seller, you should never accept a contract that’s only been pre-qualified. 

          What makes it a pre-approval is that I’ve actually looked at pay stubs. We’ve looked at W-2s. We’ve looked at tax returns. We’ve looked at bank statements. We’ve looked at all these things to ensure when we issue that pre-approval and we write that contract, we are going to be good to close and fund that loan.