Mortgage Pre-Approval vs. Pre-Qualification?

Dated: March 29 2023

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Both mortgage pre-approval and pre-qualification are important steps in the home buying process, but there are some key differences.

Pre-qualification is an initial step in which a lender will review your basic financial information, such as your income, debt, and assets, to give you an estimate of how much you may be able to borrow for a mortgage. This process can usually be done quickly and without a credit check. However, pre-qualification is not a guarantee of a loan approval.

On the other hand, pre-approval is a more in-depth process that involves submitting a mortgage application and providing documentation to the lender, such as income verification, bank statements, and credit report.

The lender will then review your financial information and credit history to determine how much they are willing to lend you and at what interest rate. A pre-approval letter can be a strong tool when making an offer on a home, as it shows sellers that you are a serious and qualified buyer. In summary, pre-qualification is a preliminary estimate of how much you can borrow, while pre-approval is a more thorough process that provides a lender's commitment to loan you a specific amount of money at a given interest rate, pending final underwriting and property appraisal.

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Marian Huish

As a full-time Licensed REALTOR® since 2003, Marian has sold over 180 homes which has given her a wide range of experience with a variety of different clients and properties. Marian has sold comme....

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