Pre-Qualified Vs. Pre-Approved - What's The Difference?

Pre-Qualified Vs. Pre-Approved - What's The Difference?


The Scoop on Pre-Qualified

Getting pre-qualified is the initial step in the mortgage process, and it's generally fairly simple.  You supply a bank or lender with your overall financial picture, including your debt, income and assets.  After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify.  Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

The Scoop on Pre-Approved

Getting pre-approved is the next step, and it tends to be much more involved.  You'll complete an official mortgage application and then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating.  From this, the lender can tell you the specific mortgage amount for which you are approved.  You'll also have a better idea of the interest rate you will be charged on the loan.

With pre-approval, you will receive a conditional commitment in writing for an exact loan amount, allowing you to look for a home at or below that price level.  This puts you at an advantage when dealing with a potential seller, as he or she will know you're one step closer to obtaining an actual mortgage.
realtoralexissalazar.com