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What is the difference between being Pre-Qualified and Pre-Approved?

Posted by: kateg 4 years, 5 months ago

(Comments)

Pre-Qualification and Pre-Approval are oftentimes used synonymously, but they are two different terms.

 

Pre-Qualification is the first step in the mortgage application process.  It is an informal determination by a lender or mortgage broker stating how much mortgage you can afford.

Pre-Approval is a guarantee in writing by a lender to grant you a loan up to a specified amount.

When you are writing an offer with a loan contingency, it is best to include a pre-approval letter with your offer to tell the Seller that you are a qualified buyer.

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