Monday, August 28, 2023 / by Fahad Karamat
Just as Hollywood has its auditions and Rodeo Drive has VIP access, LA's real estate arena has its golden tickets. The names? Pre-approval and pre-qualification. Let's step onto the red carpet and dissect what makes these two terms the A-listers of mortgage talk.
The Celebrity Gossip – What Are They?
Pre-Qualification: Consider pre-qualification as the first date. It’s a simple conversation with your lender about your income, assets, and debts. They'll give you an estimate – or a 'flirt' if you will – of how much you can borrow.
Pre-Approval: Now, pre-approval is the next level – think of it as going steady. It involves verifying your financial information and getting a conditional commitment from the lender. Essentially, it's your bank's way of putting a ring on it!
The Box Office Sales - Why Does it Matter?
Buying a house in LA is like trying to get the best seat at an Oscar ceremony. In this metaphor, having a pre-approval is like being friends with the director. Sellers know you’re serious, giving you a competitive edge in the bustling market.
The Plot Twist - Differences to Remember
Commitment: While pre-qualification is more of a verbal chat, pre-approval dives deep, verifying documents and often requiring a credit check.
Shelf Life: Pre-qualifications are like popcorn – quick and might go stale soon. Pre-approvals often last longer, giving you ample time to make your movie-star home entrance.
Appeal: Think of pre-qualification as the teaser trailer – it gives an idea but not the whole picture. Pre-approval? That’s the full HD trailer everyone's waiting for!
Oscars or Emmys? Which One's For You?
If you’re window shopping or just feeling out of the market, pre-qualification might be your go-to. However, if you’re ready to bid on that Beverly Hills mansion next to your favorite star, pre-approval is the name of the game.
And the Nominees Aren’t...
A common misconception is that having a pre-approval will guarantee the final mortgage. Think of it as a nomination, not a win. Other factors, like the house appraisal or changes in your financial situation, will still play a role in the final decision.
Navigating the LA real estate scene can feel like deciphering a movie script without the director's notes. Knowing the difference between mortgage pre-approval and pre-qualification is your backstage pass. Now, all you need is the perfect property to play the lead role in your LA story!