So we heard from the broker this evening, and he was able to get us through the desktop underwriting system for Majestic Loans, so he called it a pre-qualification. Next he wants us to make a decision about what we want (we are looking at two different builders), so he can have an amount and a property address to send to the lender.
How excited should I be about this? I know there are a lot of hoops to jump through going forward. But this is good news right?
Absolutely a good thing. Congrats. Thinking back on our adventure, the prequalification was that moment where it finally felt like things were starting to happen.
What does it really mean? Some lenders seem to alternate the two terms. However for most prequalification means that you are providing basic information. The lender, in turn, is qualifying you based on your word rather than genuine documents. None of that has been verified, and with that said the specifics and 'gotchas' that aggravate most people during underwriting haven't shown up yet.
If you're really concerned about it you can request pre-approval which will entail verification of paystubs, credit scores, tax returns and all of that. Getting that done will give you a true feeling for whether or not you'll have any big ordeals. If I were you, I'd enjoy this part and wait until you're a little closer to a contract to seek out approval unless you're absolutely positive you found the broker/lender that you want to work with.
You are headed in the right direction BE EXCITED!!
Like mentioned if they ran it through automated underwriting already and you got a pre approval that is strong. Be excited you are well on your way!
Getting through DU is a very good thing. As long as your docs back up what you state you should be fine. Baring any big collections or such on your CR you shouldn't have any issues.