Is Loan Prequalification Good Enough?

Loan prequalification is a process by which a borrower submits a pre-application to a lender for the purpose of determining their qualification for a loan. This pre-app helps speed up the loan process for a borrower and allows them to secure a home or vehicle that they may be looking to purchase.

Is Loan Prequalification Good Enough?

Loan prequalification in all circumstances is a good thing to have. Being pre-approved or prequalified means a lender has deemed the borrower an adequate credit risk and has qualified the borrower for a loan. Although the specific terms of the loan the borrower needs relative to the purchase have not been set, the borrower has a range in which to work with and negotiate from with the seller.

Are there Situations when Loan Prequalification is not Good?

It is difficult to think of situations where loan prequalification is not good enough for a borrower since loan prequalification represents initial approval of a loan for a borrower.