Margaret Szerlip November 18, 2014 Sotheby’s Newton, MA.
Pre-Qualification vs. Pre-Approval, and how we do it at Fairway
It is prudent to get pre-qualified or pre-approved before you begin your search for a new home. In general it means that you have spoken to a lender and have a basic understanding of how much you can afford to purchase based on your income and expenses. But most people don’t realize that to be “pre-qualified” and “pre-approved” are two very different things. In this competitive market place, it pays to understand the difference.
To get “pre-qualified” you simply need to have a conversation with a lender and verbally explain your income, assets and expenses to them, discuss your down payment, and they in turn will give you a general estimate of what you can afford to pay monthly for a mortgage. There is no cost and no obligation to do business with the lender. In essence, this is a mathematical conversation.
When you get “pre-approved” it means that you have provided actual documentation to a lender verifying your income, assets and debts. In addition, the lender has pulled your credit report and determined your credit score eligibility. Right away it is a more thorough and accurate financial accounting. The lender will provide you with a letter of pre-approval, stating how much money they would be willing to loan you subject to receipt of an appraisal and purchase and sales agreement as well as re-verification of your income and employment. Clearly this carries more weight and will make a difference to a seller in this competitive market.
At Fairway, we take it one step further with our Certified Pre-Approval and money back guarantee. You will know how much money you can afford and be 100% confident that you will be able to borrow the money for your home. Fairway’s complete evaluation of your financing ability including income and asset documentation ensures a closing, and if not, we will refund you up to $7500 in costs.
How does it work?
Fairway issues and certifies the accuracy of the “Fairway Certified” pre-approval as long as:
· Your personal financial qualifications stay the same or improve
· The agreed upon loan parameters stay the same or improve
· The property meets all necessary loan requirements
If we are wrong we will:
· Reimburse documented short-term moving, relocating and/or storage expenses up to a maximum of $1500
· Reimburse any documented lost home inspection or appraisal expenses up to $1000
· Reimburse any forfeited earnest money expenses up to $5,000
The Closing and Beyond
· The HUD will be available to review well in advance of the closing
· Funds will always be at the table ahead of the closing
· All parties will have the opportunity to review documents in advance
· Scheduling of closings will ensure maximum convenience for all parties involved
You won’t find another lender who will provide you with that kind of guarantee, anywhere!
 “Personal financial qualifications” includes but is not limited to employment, income, assets, credit scores, and debt.
 “Agreed upon loan parameters” includes, but is not limited to maximum loan amount, maximum total monthly payment, maximum interest rate, interest rate market conditions, down payment requirements, property insurance requirements and mortgage insurance requirements.
 “Necessary loan requirements” of the property includes but is not limited to, appraised value, insurability, property condition, inspection condition, legal title conditions, HOA