Pre-Qualification & Pre-Approval: What's the Difference?

You've heard these terms before.  What do they mean?

The act of getting pre-qualified is the first step in obtaining mortgage financing.  The lender will ask the borrower a few questions to provide the lender with a quick overview of the borrower's income, debt savings, etc.  The lender will also obtain a credit report to help determine the borrower's eligibility.

Pre-approval, however, is an actual written document stating that the borrower does indeed have the full support of a lender.  It means all necessary paper work has been done and reviewed by an underwriter.  Based on the information and documentation provided by the borrower, the underwriter will come back with a dollar amount that the borrower is approved for.

Pre-approval allows potential homeowners to shop for homes in their price range, as well as most times, the seller will take a pre-approved buyer more seriously.

Contact us today to see how you can start on the path to pre-approval!