Pre-Qualification Versus Pre-Approval
There are two forms of proof you can obtain from your lender that show real estate agents and sellers that you’re financially prepared to buy a home. Learn the differences between each so you can make a solid decision as to what’s going to add to your buying power.
- Lender provides opinion about your ability to qualify
- Estimate of loan amount and rates provided
- Usually written, but not contractual
- No financial information verified by credit bureaus
- No thorough financial background check by lender
- Lender verifies financial standing
- Certificate provided stating that borrower would qualify given current standing
- Does not guarantee rates and terms promised
The main advantage to pre-qualification is the process is much faster. However, if you’re like the average buyer, who does not have a 20%+ down payment or excellent credit, a pre-approval letter will often be worth the wait.
Give us a call if you have additional questions about pre-qualification or pre-approval.