A new season is upon us, as the calendar and cooler weather are confirmation that fall has arrived. Generally, I am a big fan of this time of year here on Earth. Who can deny their insatiable yearning for everything pumpkin spice or the frightening yet fun activities (and candy) surrounding Halloween. And then there’s the sport you call football (that’s American football for you soccer fans out there).
While we don’t have an equivalent activity on my home planet of Amicitia, I’ve grown to appreciate football more and more with each passing year. My colleagues at myCUmortgage even signed me up for their fantasy football league this year, adding to my already high level of anticipation and excitement over National Football League gamedays. My team—the Amicitia Amoebas—has slithered up the league’s leaderboard after a slow start. I’m looking forward to my match up with Cookie Monster. Yes, that’s an actual team in our league and the very reason I need to hide my stash of Oreos twice during this season!
As a fan and fantasy team owner, I watch the NFL games wearing two cranial caps: On one side, I root for my favorite team regardless, while on the other side at the same time, I hope for exceptional individual performances by members of my fantasy team. I’m beginning to get frustrated, however, by some of the rules. For example, one of my team’s receivers was about to catch a long pass when out of nowhere, someone on the defense denied him the ball. Not that it helps my fantasy team in any way, but it was redeeming to see a yellow cloth which you call a flag on the field indicating some type of infraction had occurred.
In this particular case, the call by the referee was defensive holding when all along I thought it should be pass interference. In all honesty, both infractions look very similar in nature and both result in the receiver being impeded in some way. However, the resulting penalty for the two are very different. For defensive holding, it’s a 5-yard penalty, but for pass interference, the yardage can extend as far as the opponent’s 1-yard line!
Things that often appear similar yet are very different are all around us, including within credit union mortgage lending. A perfect example and one that clearly needs to be differentiated for your members to earn and keep purchase loans in this market is pre-qualification versus pre-approval. Early in my mortgage career, even I confused the two, which is precisely why you need to make sure your members recognize and comprehend the differences before they start the ever-competitive home search.
To assist you in educating your members on these very important differences, below are some of the key elements of pre-qualifications and preapprovals, as provided by Investopedia:
Pre-Qualified
- Provides a ballpark estimate of how much someone can borrow based on data the borrower submits to their credit union
- Doesn’t hold as much weight as pre-approved to prospective sellers or their Realtors
- Typically done for free over the phone or online
Pre-Approved
- Provides a comprehensive review of creditworthiness of the member applying for the mortgage loan
- Speeds up the buying process
- Requires the completion of a mortgage application and submission of various documents that will give the credit union a clear picture of the borrower
The differences are evident—while similar in the minds and eyes of many credit union members, you need to make sure they understand those differences.
Considering most credit union members only go through the mortgage process a handful of times in their lives, things like differentiating between pre-qualified and pre-approved can be confusing. As their trusted credit union, you need to always be there to help answer their questions and make the most out of their pursuit of scoring a touchdown with homeownership.