Pre-Qualified vs. Pre-Approved
They may sound alike, but when it comes to getting a mortgage, their differences can have a major effect on whether you’re moving in or missing out on the home of your dreams.
Pre-Qualified
- An estimate of your borrowing power from a lender, often determined over the phone.
- A determination of whether you would likely qualify for credit under a lender’s programs and standards.
- An examination of your income and debt levels that you provide to a lender and may (but not always) include a credit check.
Pre-Approved
- A written commitment issued by a lender after a comprehensive analysis of your creditworthiness including, verification of income.
- A formal decision about your credit; indicates a mortgage commitment letter is available.
- Approval conditional upon identification of a suitable property and confirmation of no material change to your financial condition or creditworthiness prior to closing.
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