What’s The Difference?
When purchasing a home, obtaining a letter of pre-approval and pre-qualification from your lender is an important step to take.
A mortgage pre-qualification means your lender has looked into your credit and has made the decision that you are eligible for a loan up to a certain amount (they will give you that dollar amount). Most times, pre-qualifications are estimates, not exact numbers.
A mortgage pre-approval is a statement from your lender that you qualify for a specific dollar amount based upon your credit report, pay stubs, salary, assets and bank statements. Different lenders require different documents.
For future reference when trying to purchase a home, a pre-approval letter will make a stronger impression on sellers and let them know you have the funds to purchase the home. Some sellers will even require one before going to look at the home for the first time!
In the end, talk to the bank–get an estimate before you start the home searching process!