Quick Financial Fact: Pre-Qualification
The term “pre-qualified” can be tricky. A pre-qualification for a loan does not mean that your financing is secure, although 37% of prospective home buyers believe it does. When you’re pre-qualified, it just means that your lender has worked out approximately how much you can afford to borrow. At this stage, most of the actual verification of this number has not been done, such as a credit report or verified documentation of the information provided. This is why a combination of honesty on the borrower’s part, and diligence on the lender’s part is necessary to obtain a pre-qualification that won’t let you down when it’s time to purchase.