Buyers hear a lot of similar-sounding terms. They are not the same, and in a competitive market the difference can decide whose offer gets accepted.
Pre-qualification
An estimate based mostly on what you tell the lender about your income, debts and savings. It's a useful starting point for a budget, but sellers and their agents know it hasn't been verified.
Pre-approval
The lender pulls your credit and reviews documents like pay stubs, tax returns and bank statements, and often runs your file through an automated underwriting system. It's much stronger than a pre-qualification — but in most cases a human underwriter still hasn't reviewed your file.
Underwriting approval before you find a home
Some lenders will have an underwriter fully review your file before you have a property, leaving only the home-specific items — appraisal, title and insurance — as conditions. This is the closest a financed buyer can get to looking like a cash buyer.
Having been that underwriter, I can tell you: most of the surprises that sink loans are found at this stage. Finding them before you write an offer is a huge advantage.
Conditional approval and clear to close
Once you're in contract, the underwriter issues a conditional approval — a list of the last items needed. When every condition is cleared, you're "clear to close," and the lender is ready to fund.
If you're planning to buy in San Marcos, Poway or anywhere in San Diego County, I'm happy to look at where your financing stands and what would make your offer stronger.
Want a second set of eyes on your financing?
I’ll tell you honestly where your offer stands.
