Pre-Qualified vs. Pre-approved

Pre-approval or pre-qualification? Many new home buyers ask, “What’s the difference?”

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A pre-qualification is an informal estimate of how much you can afford for a house. Your lender uses the information you provide about your income, finances, and credit history to make an educated guess about your ability to buy a home.
Getting a pre-approval for a mortgage loan is a different story. Pre-approvals carry a lot more weight and are a better indication of your ability to fully qualify for a mortgage loan.
Pre-approvals have several advantages over pre-qualifications:
• Sellers prefer to negotiate with prospective buyers with pre-approvals over simple pre-qualification letters – thus potentially getting you a better price for the home.
• A solid pre-approval will help you get your loan processed faster. Getting a pre-approval could take your offer from a 30 day closing to as little as 2 weeks.

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