Differentiating a pre-approval from a pre-qualification.
What’s the difference between pre-approval and pre-qualification? Today we’ll delve into the distinction between mortgage pre-qualification and mortgage pre-approval.
When you speak with your mortgage professional, they’ll gather your financial information either verbally or through documentation related to your income. Based on this data, they will determine the amount you could potentially borrow to purchase a property. However, it’s important to note that at this stage, nothing has been fully verified, and the pre-qualification is based solely on the information you provided.
Now, let’s discuss mortgage pre-approval. This is a more thorough process where you submit all the necessary documents, and your loan is fully underwritten. Unlike pre-qualification, pre-approval involves verifying your income and credit. In essence, with pre-approval, the lender has thoroughly reviewed your financials and confirmed your eligibility for a specific loan amount.
Pre-qualification is a preliminary assessment based on the information you provide, while pre-approval involves a comprehensive evaluation with verified documentation. If you want to be fully confident in your borrowing capacity, it’s best to aim for pre-approval. Call or email us if you have any questions. I look forward to hearing from you!