Mortgage Loans: Pre-qualification vs. Pre-approval

When dealing with the subject of mortgage loans, many people get confused by the difference between pre-qualification and pre-approval. While they are both similar, they have a few key differences that you should understand. Here are the basics of pre-qualification and pre-approval with mortgage loans.

Pre-qualification

With loan pre-qualification, you are going to talk to the lender about the possibility of getting a loan with them. Most of the time, this is a very simple process that can be done over the phone. You are going to give them a general idea of what your financial situation is like. You will also tell them approximately what your credit history is. With a pre-qualification, they are not going to pull your credit file or verify your income. They will simply tell you that if everything is accurate, you could potentially get a loan for a certain amount of money.

Pre-approval

Pre-approval is a process that is much more involved. With pre-approval, you are going to fill out actual documents for the bank. They are going to check your credit file and look at your credit score. They will verify your employment and your income. With pre-approval, you know that you will be able to get a loan for a certain amount.

blog comments powered by Disqus