Pre-Qualified vs. Pre-Approved
What's the Difference?
Are you preparing to get a new home? Chances are high that you may come across mortgage pre-qualification or mortgage pre-approval or probably both. It is better to have an idea about these terms and find difference between both. When taking the first step towards home ownership both pre-qualified and pre-approved are important factors to consider. Before proceeding let’s find out the difference between both.
Difference Between Pre-Qualification & Pre-Approval
Mortgage Lenders often use pre-qualification & pre-approval interchangeably, as both terms are similar. Here is how the terms may differ:
While buying a house, you need to go through the mortgage process and the first step that you need to clear is pre-qualification. After you are pre-qualified, pre-approval is the next step. Under the pre-qualification stage, you provide your financial information to the lender including credit score, assets and overall income. After collecting all the information, the lender reviews it and provides you the estimate of what you qualify for.
In order to qualify for a mortgage, you always have to provide documentation of your financial history. For a pre-qualification it can often be self-reported. Mortgage pre-approval is similar but normally requires documentation and verification of your debts, assets, and income. Also, it often requires a credit check.
Unlike pre-approval, prequalification is a simple and quite informal process that requires no cost and no documentation. Also, the interest rate is not specified whereas a pre-approval is a more formal process that requires detailed documentation and is reviewed by an underwriter.
Planning to buy a new home? We can pre-approve or pre-qualify you for a mortgage.
We follow a simple process; you just need to provide your overall financial picture including assets, debts, and income. After evaluating all the information, we will give you an idea about how much home you can afford.
Preapprovalmortgageloan.com believes in making things easier for you, you can provide all this information over the phone or through email- our mortgage professionals are here to help you!
The Bottom Line
Pre-qualified and pre-approved are similar, but not the same thing. Getting pre-approved is a more formal process that yields a more substantial result to show sellers you’re a serious buyer.