Prequalification vs. Preapproval


Getting pre-qualified is the initial step in the mortgage process. Simply supply us with your overall financial picture including debt, income, and assets. After analyzing this information, we can give you a better idea of the mortgage amount for which you may qualify. Pre-qualification can be done over the phone or on the internet, and there is no cost involved. Loan pre-qualification does not include an analysis of your credit.

The initial pre-qualification step allows us to discuss the needs you may have regarding your mortgage with Fremont Bank. We can explain your various mortgage options (fixed vs. adjustable rates; FHA vs. regular financing, etc.) and recommend the type that may be best suited to your situation.

Please note, that because the pre-qualification is only based on the information you provide, your pre-qualified amount is not a sure thing; it's just the amount for which you might expect to be approved. For this reason, a pre-qualified buyer doesn't carry the same weight as a pre-approved buyer who has been more thoroughly reviewed.


The next step, getting pre-approved, tends to be much more involved. You'll complete a mortgage application and then supply us with the necessary documentation to perform an extensive review on your financial background and credit history. From this, we can tell you the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan. With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level. Obviously, this puts you at an advantage when dealing with a potential seller, as he or she will know you're one step closer to obtaining an actual mortgage.

The other advantage of completing both steps - pre-qualification and pre-approval - before you start to look for a home is that you'll know in advance what loan amount you can afford. This way, you don't waste time with guessing or looking at properties that don’t fit into your budget. Getting pre-approved for a mortgage also speeds up the buying process when you do find the perfect place. When you make an offer, it won't be contingent on conditional financing, which can save you valuable time. In a competitive market, this lets the seller know that your offer is legitimate - and could prevent you from losing out to another potential buyer who already has financing arranged.

Neither a pre-qualification nor a pre-approval guarantees that you will be approved for a mortgage loan. The final approval is given after the property appraisal, title search, re-check credit and other verifications have been completed. For more information, call to speak with one of our loan specialists.

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