When you see 'Q and A', most readers think of 'Question' and 'Answer'. Where a home loan is concerned, 'Q and A' is most often refers to 'Qualified' or 'Approved'.

Ask yourself this question: "Do I want the buyer for my personal residence qualified to buy or approved to buy?

Approved, of course, and here is the key difference between 'Q' and 'A'...

In today's loan market, many lenders humorously admit that the key initial test to the likelihood of lending is whether or not the applicant (the would be homebuyer) can past the FAM test. If able, then today's loan products are so versatile that assets (what does the applicant own versus the debt against the applicant), income (employment longevity and likelihood of continuation), and credit history ( FICO-credit scoring) can be viewed as inputs to the type, size and quality of a home loan as an appropriate LTV (loan to value ratio) is prepared to fit the applicant's overall picture as a borrower.

The FAM test? ... fog a mirror... but before you discount the simplicity or humor, if you accept such, of the FAM test, remember 'Q' and 'A'... all you want is your property to close and when you receive, in writing, that the prospective buyer is pre-"approved" it means a lot more than pre- "qualified". Pre-qualified may mean as little as the fact that the FAM test has been passed. Pre-approved, from an experienced, ethical lender can mean as much as, "just find the property that fits the lending profile, make sure the property ALSO passes approval (value, LTV, condition, etc.) and start scheduling closing. Notwithstanding that the pre-approved buyer has to be alive at closing, that the property has to be in existence at closing and the normal checklist items found in all home loans, pre-approval is the only way to work the professional side of the real estate home loan industry.

So, when you're told that a buyer prospect is 'pre-qualified'... think of 'Q' and 'A' and the FAM test. Ask if the buyer prospect is actually 'pre-approved', get it in writing and read the details of LTV ability as well as the down payment (DP) or cash-on-hand (equity purchase) if such information is offered. Then, fog your own mirror to insure you see a happy smile... this 'pre-approved' buyer prospect's offer on your own residence is far better than the 'pre-qualified' buyer prospect's offer, every time...

Memory key? A buyer (questions are already answered) is better than Q buyer (questions yet to answered).

Pass it on... you may think any rookie would know this basic information but just last week I had the opportunity to explain 'Q' and 'A' to a 20-year veteran. Her answer as to why she had never cared about such an elementary task? "That's the lender's job...I just sell 'em."

And, so it often goes....