What is the difference between a pre-qualification and pre-approval?
When someone talks about mortgage pre qualification vs pre approval, but they don’t mean the same thing! Before the home search begins with your real estate agent, a pre-approval mortgage letter is vital. The pre-approval means the mortgage lender has looked into your credit report as well as verify your income, bank statements, tax returns. The mortgage pre-approval letter indicates that chances for getting a mortgage approved are very high as long as your situation doesn’t change. But a Pre-Approval is not the same as a Pre-Qualification. Read below to see the differences:
Going through a mortgage Pre-Qualification is not very strenuous. The loan officer won’t check any documents from you and will base the pre-qualification off what you tell them verbally. The loan officer typically won’t check your credit either. Overall, a Pre-Qualification letter does not really mean much. Everything could change or you could be unknowingly giving incorrect information. You are going to want a full Pre-Approval to make sure that you are qualified. This allows you understand and know all of the numbers before you begin the process.
As the name implies, it lets everyone (yourself, your agent, the sellers, and the seller’s agent) know how serious you are as far as buying a home is concerned. While a pre-qualification is merely a conversation between the loan officer and a you, a mortgage approval is very in-depth. The loan officer will review your credit report, as well as all of your financial documents. Some files are sent to a manual underwriter to review your file. This is all done to make sure that you are secure with your mortgage financing. This is one more step to make sure that nothing falls through during your home buying process.
Now that you can understand the difference between mortgage pre approval vs pre qualification we’re happy to get you pre-approved. Click on the button below to get started today!